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

For my friends that are not aware of the incident with United Airlines breaking guitars, I am posting the video link below.

It goes without saying that we need to be careful how we treat our customers.  Three million views in less than a week is a lot of negative press!

I’m sure during the development of this issue, the United representative(s) felt the customer should have received consideration outside the policy, but did not feel appropriately empowered.

Although generalized policies are necessary in any large company, these should always be backed up by employee empowerment.

Individual customers never like to be shown they are being treated impersonally by “broad brush” policies that leave them without identity or options.  ”I’m sorry Mr. Jones, there is nothing I can do, this is our policy”, is a good way out for the representative, but could be the worst thing to say to customer.

(Before you upset a customer, ask them if they own a video camera)

here is the link: United Breaks Guitars

Rudy Vidal
Creating Profitable Loyalty

I was listening to a talk by Iqbal Quadir an inspiring entrepreneur who is changing the world through human empowerment. He said two phrases that made an impact.

“Connectivity is Productivity” and “Specialization is Productivity”.

Both of these make sense, but bringing them together is powerful.

Although I’m not a math major, I could not resist doing the logic.

If Connectivity = Productivity
and
If Specialization = Productivity

Then it follows that:
Connectivity = Specialization

As I thought about it, it didn’t take long for some of the challenges and opportunities in our markets to start making more sense.
One of these changes is the shifting marketing paradigm that is largely ignored.

For the last couple of hundred years, business has relied on raw POWER as the deciding factor of success. Although brilliant ideas and management are still necessary, the power to reach more people, to build more products, to move them faster, is the engine for success. We only need observe mass mailing, television, or the number of SKUs in Nike’s shoe lineup, to see that it’s about POWER more so than efficiency.

In the end, we are forced to homogenize our segments, compromise the essential value in our products and dilute our brands in order to widen our mass appeal. In essence, we destroy, destroy and destroy in order to deal with the inefficiency of the paradigm.

But maybe the equation: Connectivity = Specialization, presents new possibilities.

The drastic increase in Connectivity accelerates the normal rate at which we create “specialized” communities of like-minded people. These communities form faster and become larger and more powerful than would normally be possible. In essence, they become large networks of beacons searching for more resonant experiences, people, products and brands.
Suddenly, we find we may not need to look for them, they may be inadvertently looking for us.

The problem is that in order to be noticed we need to resonate, we need to have a point of view, a stand or clarity of purpose, what Simon Sinek might call a clarity of WHY?

This new paradigm has potentially meaningful characteristics:

1. It is personally meaningful
2. It is deliberate (not passive, like mass media)
3. It provides an opportunity for deeper connections.
4. But, it requires TRUST.

The old paradigm of PUSHING our value to the masses is giving way to the need for CLARITY and TRUTH that allows smaller more aligned groups to hear us. A clarity and truth about who we are, and what we stand for as companies. ?This clarity of purpose, turns the brand into a resonator that draws all that are tuned.

Only one problem . . .

Companies today are not good at CLARITY or TRUTH.

We find it difficult to be clear on what we stand for. (read your mission statement lately?).
And we find it difficult to be truthful because we want to maximize potential customers as we aim at the masses.

Are we sure of our WHY? Can we be true to it? Can we resonate?

I vote for investing some resources here, so we can stop sending junk mail.

Rudy Vidal
Committed to Profitable Loyalty – XCS

One of the most common hurdles in trying to improve the customer experience, is that we view the customer’s situation through our own internal filters, limitations, policies and generalization. In effect, we can hear the customer but what we “know”, doesn’t let us listen.

Those that touch the customer daily know more than anyone about what the customer considers important. As surprising as it may be however, I find that those that touch our customers every day are not the ones designing the customer experience. Those that decide are often somewhat removed and rely on their “past experience” to make the right decision.

Some time ago, I gave a contact center manager a challenge to transform the customer experience with the representative by only changing the rep’s greeting. At first, the feeling was that the greeting could not change the experience. The content of the experience was so much more important than the greeting that it could not be overshadowed. Just to be nice, she played along. After considerable thinking and word-smithing, the new greeting was surprisingly similar to the original. The reasons for the measured change were all logical and full of merit, backed by experience and knowledge in customer service.

Because I had done this exercise before and new the potential results, I pressed on. Otherwise, I would have likely agreed with the logic and “let sleeping dogs lie”. Instead, I provided an idea for the new greeting. “Hello, thank you for calling XYZ, my name is Rudy Vidal. I am committed to resolving your issue today, please let me help you.” This new greeting was received with raised eyebrows and determined to be “corny”. I agreed it could be “corny” , but in whose eyes?

To a contact center person who is aware of all the difficulties associated with actually resolving an issue, it may sound corny. But to a customer who is having a bad day, who has just gotten escalated and has lost hope of resolving her issue, this greeting could be comforting, perhaps even surprising. It could disarm a person who is ready to take two full minutes to expound, at high volume, why she is so upset. At the very least it is unexpected.

We tried it in a small group of representatives. Customer Satisfaction increased by double digits, representative satisfaction did the same, first contact resolution went up.

Sometimes, it is difficult to put ourselves in the customer’s shoes. We see their situation, only through our own. We try to walk in their shoes, but fail to remove ours.

By the way, the most surprising aspect of that experiment, was the effect it had on the representatives. They were more loyal to the customer, more engaged in the solution, more committed. First call resolution went up, not because empowerment policies changed, but because the representatives changed. What they said to the customer changed what they did.

Two suggestions:

• Make sure to include people that directly touch customers in the creation of new solutions.
  Have them represent the customer without regard to internal limitations or
  common knowledge.

• Try new things, after all nothing will change until something changes.

Rudy Vidal
Committed to XCS

Sometimes I talk about the idea of Profitable Loyalty and often I’m asked what I mean. So, here it is:

Not All Loyalty is Profitable, therefore, Not All Loyalty is Good.

Profitable loyalty is the result of a successful alignment of our corporate goals and capabilities with the values of our strategic customers.

When we are aligned with these customers’ values, we have a greater likelihood of setting the right expectations, of delivering on those expectations, and of creating partnerships based on mutual trust and benefit.

When we are not aligned, we find ourselves with large numbers of unprofitable customers who never seem to understand our capabilities and often demand that, which we find difficult to deliver.

Profitable Loyalty comes from clearly defining who we are, who we want to become and with whom we want to do business – Segmentation.

Once this is clear we can develop and maintain policies, processes and delivery mechanisms that add value to strategic customers who are aligned with our direction and understand and value what we do. It is here we want to invest in creating positively emotional touch-points.

There is nothing worse than having customers push us to be something we are not, and don’t want to become. It adds instability and costs to our business. It creates frustration in our employees and stresses our processes.

Let me be clear. I‘m not saying we should not listen to our customers when they are asking for new capabilities or innovation. Great customer communications and flexibility to meet market needs is a basic tenet of Loyalty. However, trying to be everything to every customer is a sure formula for failure. There are things we do well, there are thing we need to improve and there are things to which we need to say NO.

If your company is NOT concentrating on Profitable Loyalty, you may be experiencing some or all of the following:

• Your most important customers are the least profitable.
  
• Price is the prime negotiating variable
  
• Process exceptions seem to be the rule
  
• You are becoming increasingly reactionary
  
• Customer attrition is increasingly an issue.

At times these symptoms seem endemic to an industry and therefore, par of the course. Accepting this as our reality, puts us in danger of racing our competition to the bottom. On the other hand, we can thrive in the face of adversity if we are able to re-align ourselves with the values of our strategic segments.

All customers are not created equal.

Rudy Vidal
Committed to XCS

During a seminar last week, someone asked the following question:

“More industries than ever are experiencing runaway price and margin erosion. Why is that? More importantly, what can we do about it?”

I believe value is being lost as a result of our lack of understanding of shifting paradigms.

Economies naturally progress through value shifts. For example,

from Raw Material Economies (pre-industrial)
to
Product Economies (Industrial)
to
Service Economies (post industrial)
to
Experience Economies. (information)

Although we can still find economies at all four levels throughout the world, most of the higher systems are now Experience Economies. In experience economies, by and large, consumers place lesser value on Raw Materials, Products, or Services. Instead, they place more value and are willing to pay more for the Experience. Products and Services, although required and expected, are no longer the prime field of differentiation. Their expected high quality is simply a minimum business requirement.

Sadly, within our experience economy there are companies and entire verticals that may not have yet noticed the shifted paradigm and still offer products and/or services as their key value proposition. A perfect example is the consumer electronics sector, which continues to assert product features as their key value. Features, however, are easily copied, creating short-lived differentiation. In the absence of other differentiating value, they turn to price. And so, the cycle begins: Lower prices causes reduced margins which causes diminishing profits which creates pressure to reduce costs which causes layoffs which brings reduced purchasing power which prompts the need for lower prices. You get the idea.

A surprisingly large portion of top management I meet believe customers demand and cause lower prices, without considering the possibility we may simply be misaligned with customer values, which ultimately forces us to turn to price. After all, although lowering price is not usually the best course of action, we cannot deny it is an easy and generally effective way of getting attention; if only for a brief moment.

Maybe we should learn from others:

• American auto manufacturer’s have refused to see the new paradigm. They are still selling cars as if it were 1950.
• Nordstrom, on the other hand, sells the same exact merchandise as other department stores, but charges a premium based on the experience.

(I’ll leave more, and perhaps better examples to you – please share through a comment.)

Perhaps it’s time we listen to the voice of the customer and align ourselves accordingly.
If we don’t, our only recourse will be lower prices, outsourcing and ultimately layoffs.

Rudy Vidal
Committed to XCS

While reading, it occurred to me that part of the reason customer service has a large impact on our lives is not because it is special in and of itself, but because it is an extension of the golden rule and therefore, of good social order -

“Do unto others as you would have them do unto you”.

The curious thing is that in order to follow the golden rule, we must be willing to temporarily disengage from our own condition. That is to say, we must focus on the customer’s point of view, putting ourselves in their position.

We cannot offer good service only when we feel the world has been fair to us, when things are going well, when all is just as we want it. Good customer service requires that we consider the needs of another, even as we struggle with our own. OK, this is sounding a little dogmatic, but isn’t it the essence of good customer service.

I often notice three types of customer service people.

1. Those of us whose willingness to provide XCS is dependent on whether or not we are receiving it.
2. Those of us who are simply trying our best to do a difficult job
   and
3. Those of us who have realized, strangely enough, that our own quality of life is usually positively affected by our honest effort to consider the needs of others.

Those of us in the first group, need to move to either of the others, or should consider a diferent line of work. Most of us, however, find ourselves in the second group as we move forward day to day to do our best at a job that is, at times, difficult. This is not a bad place to be.

But, the blessing of customer service work can more readily be felt in the third group, where our lives tend to improve because of our work. Where we become more tolerant and our problems seem to become less debilitating as we disengage from the idea that we are the center of the universe, while we concentrate on helping someone else.

Service does not need to be monumental or earth shattering. It just needs to consider the customer’s point of view separately from our own.

“An eye for an eye makes the whole world blind” – Mahatma Gandhi

Rudy Vidal
Committed to XCS !

On Monday, as scheduled, the technician came and connected the new line on the outside of the house. After some time, not knowing they had come, my father checked to see if the line was working and found the main line was not working, but the secondary line (available only in some of the rooms in our house) was now present.

He called Quest and asked them to return and install the line correctly. A new visit was scheduled on Thursday.

On Thursday a technician knocked on the front door to let my father know he had finished re-installing and was leaving. My father, who is not easily fooled twice, asked him to wait so they could test the line together. They found once again, the connection was made incorrectly. They both went outside and the technician quickly discovered the problem, fixed it and went on his way.

What is wrong with both of these customer experiences?

Most of us might say what went wrong was the technicians’ inability to complete their work correctly the first time. However, when I talked to my father about it, he seemed to understand and accept the inevitability of human error. What he was having trouble with was the lack of intention to provide a good service. Both times the technicians were uninterested in the effectiveness of their effort and more interested in moving on to the next task. The problem in my father’s mind did not seem to be lack of expertise as much as lack of intention.

Interestingly enough, if the right intention had been present, the problem, the costs associated with the second visit and the strain on the customer relationship would have been averted.

Why then, would Quest not ask their technicians to check with the customer before and after doing the work? The return on investment is certainly clear.

Intention overpowers errors and inefficiencies – because we are human and we value experiences more than error-free service.

Rudy Vidal

Committed to XCS !

In the interest of fairness and support to our ailing automotive industry I went to a Chevy dealer, in spite of my resent experiences.

I took some test drives with Christian, a nice young fellow who was very interested in my needs and working hard to address any of my questions, as we drove. Once we returned, as is expected, I soon met Christian’s manager, who also seemed pleasant and interested. However, he soon brought up the fact that the currently offered 0% financing was only available until Monday and that I would have to act fast. He asked me what was keeping me from the purchase and I mentioned that I was hoping to reach $XXX.XX as a monthly payment. He sent me off on another test drive and mentioned that when we returned, he would do his best to work the numbers so we could reach this goal. Great, I said, and went off to the next test drive with Christian.

On my return, after some niceties, I asked him “Perhaps we can go inside and see if we can work on those numbers”. His response, was shocking but not surprising “well, only if you are committed to purchasing the car”. At that point it became clear that the sales manager was interested in something beyond my best interest; perhaps his time. I said goodbye.

From there are I went to a couple of dealers. I purchased a Toyota. I reached the price point I needed, my dad likes it. Almost everyone won.

Rudy Vidal
Committed to XCS!

Our second visit was to a Jeep and Chrysler dealership. The salesman was very nice, family guy with 5 kids, etc. We went on a couple of test rides and liked two of the cars. When we asked the pricing for each of the cars his response was . . “Well, which one do you like better?”. It depends on the price, we mentioned. He then said, “Well I can work up a better number if you tell me which car you prefer”. At that point, it became clearly apparent why I’ve given up on American cars.

We mentioned again, that we lilked both and wanted the best price on each. He asked us to sit down, then asked us to fill out a credit application before he went to the manager to ask for a price.

Why is it so hard to find out the best price on a car?

We were ready to walk out at that point, but felt bad for the salesperson who had spent quite a bit of time with us. The salesperson stayed in front of the manager for a total of 14 minutes, while we waited on the other side of the dealership. Finally, I got tired, went over to the manager’s desk and asked if there was anything wrong. The manager, who was wearing sunglasses indoors, pitched his head down and looked over the top of the glasses and said, “Well… I’m having trouble with the fact that you’re not committed to a car”. Sigh . . . . we left.

Why can’t the American Car dealerships see the obvious:

1. Technology should be used to improve the product and the customer experience, not just to cut costs.
2. Informational access has changed everything – I know your costs, I know your methods, I just want open and respectful treatment.
3. Don’t manipulate the sales situation. Manipulate your offerings and my experience, I’ll do the rest.

Wake, up. You are not in the car business. You’re in the customer satisfaction business.

I supposed it would be best to have an American automobile industry. But I suspect its too much to ask.