Archive for January, 2008

Our companies abound with “CXOs”: the CEO, the COO, the CFO, the CMO, the CIO. But what about the CCO, the Chief Customer Officer. The person who s accountable for the “Customer” in the business. Does your business have a CCO? Is your CEO the CCO?  In most businesses there is an operations director, a customer services director. In some now there is even a customer experience director.   This is particularly true in financial services in the UK. The regulatory body, the Financial Services Authority (FSA) is enforcing something called “TCF” or Treating Customers Fairly. Its intent is extensive. To change not only the reporting but also the culture and executive responsibility for the way customers are treated by financial services companies.   But is the need for a Customer Experience Director in itself missing the point. The point that everyone should be championing the customers’ cause. Everyone should be a CCO. There should be an army of CCOs in every business.  

For example take this organisation chart from Starbucks. There’s the customer and then there’s every employee. If only this were true in real companies we would not need a CCO.

In practice, the organisation chart looks very different. There are many layers of management above the employees who talk and deal with customers. Many staff who do not talk to customers but who have responsibilities, targets, accountabilities and obligations to shareholders.   The further up the organisation, the greater the perceived shareholder pressure. And the lower the perceived customer pressure. It is tempting to look at the customer vs the shareholder as the debate or the balance to be achieved. But what if they are not opposite ends of a  seesaw. But the same thing. What if we can get more value by getting both shareholders and customers to the same end of the seesaw rather than just getting a balance between their needs.

At the heart of the challenge, of the see saw, one needs to look at the time frames that the shareholders and customers use. The very short term. The very long term.  The two parties both want the same thing – to maximise the value they get from the transactions between them. But the customers’ view of value is frequently wider, longer and more complex than the shareholders’ view.  

When it comes to buying insurance, customers seldom forget how they were treated on a claim 10 years before. When their business bank is trying to sell pensions to their company, customers do not separate the bank from a poor experience of trying to replace a stolen credit card on their personal account. When offered free internet by their phone company, customers can turn the offer down because they have wasted so much time sorting out their mobile bills.  Yet businesses continue to play the short term game. To incentivise customers to buy with offers that they fund from marketing and sales budgets. Offers to stay, to buy more, to recruit their friends. Offers for better functionality, better prices, free add ons, special treatment. Companies need to make sales targets each month, each quarter, regardless of external changes.   These are all legitimate things to do. But so much more expensive or so much less expensive depending on whether the customers concerned are emotionally on your side or not. So much harder or easier to meet targets depending on what your customers have experienced from your company before. So much harder or easier to execute on plans if the staff who talk to customers are on side or not. We know these things to be true.  

But in business we “need” things we can measure. True representations of how customers behave are very hard to measure. Results are in reality based on complex interactions. Based on emotions which change rapidly. Much harder to measure than actual sales volumes, costs or profits. So how can a CCO compete with a CFO who can measure numbers in columns? How can he compete with the CMOs sales figures?  The answer is it’s very hard. But it’s started to happen. Many companies now take simplified customer measures into account. Customer satisfaction. Likelihood to recommend. None are perfect but they are bringing the customer into the board room. Over time the most advanced companies are linking these measures together and correlating them with internal quality measurements and external commercial figures. It isn’t easy to do. But some companies now believe they can say what a percentage point on a customer scorecard is worth to the bottom line. 

The further battleground for these more advanced companies is how to change these scores. How to change the real commercial results through doing things that customers like. Yes, better experiences. But not at any price. In most cases the relationship between experiences, satisfaction, researched statements and actual buying behaviour are far from linear. And not the same for each industry or business within it. 

A major shift is happening. From measuring to understand what’s happening with customers, to simply listening to customers to know what to do. And next to listening to customers in importance is listening to front line staff.  So what is the role of the CCO? To get the arguments into the boardroom? To get the customer measures in place? Yes but there’s something bigger. The true CCO is the voice of the customer and the voice of the front line staff who know what customers know. The CCO’s job is deeper than measurement or argument. The job is to get the business to take decisions based on what the customer knows about your business. Frustrations, competition, opportunities. And when this happens shareholder results change. Markedly. Not by small amounts.

CCO, chief customer officer | No Comments

Blogging now resumed as we switch to a new site and a lot has happened in 3 weeks!  The urge to buy a car overcame me and I bought a Land Rover Defender last week – a diesel of course. So cute. And practical where I live out in the country – yes it has real mud from a real field. And with so many advocates locally that I ended up testing one.

 The 911 is up for sale ( call me if you want to benefit from the low low price I can get from a dealer! ) and a Mini Cooper S beckons next if it goes. If it doesn’t fetch a proper price then I won’t be sad to keep it. Just unlikely to upgrade based on depreciation. But that’s not really fair – I’ve suffered far worse with other cars eg an Audi A8 that lost 28k in 12 months!

So from passionate advocate to neutral seller? Not really – still a mad fan as I have the 22 year old one to fall back on. But no longer an advocate. Ultimately the service experience has been very good, the product is brilliant. But the sales experience has resulted in the opposite result from that desired. Emotions are funny things but ignore them at your peril !

 Now the Land Rover and the Mini buying experiences…. I’ll save that for tomorrow

Porsche, Uncategorized, customer experience | No Comments

Some interesting observations from China based colleague Tony Bruno on his trip to the UK for the 11th LimeBridge international gathering:

“I hired a car from Europcar via their website. Normally, you are given a choice of whether to buy a tank of fuel from the care hire company at the start of the hire.

I always refuse because it is basically a con. It is virtually impossible to return the car empty, and hence what you are doing is buying fuel for the hire company who can re-sell it to another unsuspecting punter.

However, on this occasion I was informed that Europcar have now deemed it “mandatory” (the assistant’s word, not mine) to buy a tank of fuel from them. Nowhere on the web site or any of the confirmation material I received from Europcar did it state this. I returned the car about half full so I paid for about 20 litres of fuel I could not use. What next, I wonder….

3) When we stayed in the Paddington Hilton I noticed that there was a “charitable donation” charge on my bill of £1 per night. I guess 99.999% of people who get this charge ignore it. I must be in the 0.001%.

There is a point of principle here (maybe, like the Europcar case it’s a “mandatory” charge). I like to be informed in advance if some charge is going to be levied – and the option to opt in, rather than having to positively opt out. I also assume that Hilton are collecting a lot of money from their customers, donating it to charity and getting some marketing mileage out of it. So, looks like their getting their customers to pay directly for some of their marketing….

just call me Mr. Grumpy. Happy New Year…. “

europcar, hilton, mandatory options | No Comments

For 4 years now, Budd has been championing the cause, developed at Amazon, of “The Best Service is No Service”.

With our passion for “How do we stop doing dumb things to our customers and people?” we remain focused on how companies can drastically improve their customer experiences by reducing contact by 20%+ per annum, with its consequent impact on operating budgets.
But, and there is a but, many companies appear to be adopting the strategy of saving 20% of their operating costs without a good understanding of what it takes to avoid inflicting pain on their customers.

So – your strategy is to reduce unnecessary contact by 20% in 2008 – but how much damage or how much good will you do for your customers?

The most common problems are:
— A focus on cost not the experience. The focus must be on the experience first with cost savings as a consequence
— Starting projects to fix the problem. It’s about implementing proven, sustainable processes that constantly take out unnecessary contact. Projects rarely sustain the behaviours required over years
— Trying to do too much too fast. The first wins are critical but they need to be part of a coherent approach
— Leaving out the frontline staff. Regardless of new tools to gather data, tapping into what the frontline staff know and their engagement is key to sustainable success
— Doing again what worked a year or two ago but lapsed as soon as the next focus appeared

Budd brings proven processes that can be embedded to make the savings year on year. Our top clients are saving 80% of their operating budgets now.

On a £100m operating budget, you’d be saving £20m per annum in the first year. That’s £1.67m per month, £400k per week. If it’s done well you’ll be a hero. If its done badly it will cost another £100m to regain your brand’s reputation. Do you feel lucky? Or do you need to get it right first time?

Contact us if you’d like to talk through your ideas – peter.massey@budd.uk.com

contact rate, customer experience, dumb things | No Comments

I thought it was all sorted but no….. The Porsche dealer phoned to pay the whole thing. Common sense prevails. I just have to get the car there now for 2 days. No one has come back to try and give me a better price for my car in order to buy another

So where am I emotionally 5 weeks after all the excitement of wanting to buy a “new motor”.

At 3 weeks I’d moved from raving fan to neutral at best. At 5 weeks I’ve had time with the car again. An empty road down to the coast at dawn. A few beers with local fans who’ve bought them and I’m back in the fold. But….

But they have generated the desire to change car. They wanted to prise me from something special and get me into something even more special. But they weren’t able to close on it. So now I have mentally detached but not attached to the next thing. They have put me in mind to switch.

So I’m out trying new motors…. But no calls coming from Porsche whilst I’m prospecting. Aston Martin? Went to see round the factory last year – drool!! Drop dead gorgeous but no way to drive it everyday, more fragile than a china cup in field of bulls, and half the fuel consumption. It might be British Racing Green, but its certainly not environmentally green and a pain to keep filling up. An Alfa Romeo like the one we hired and burned across Europe in. A steal for such good looks and a great drive, even if the diesel is the one to go for. Or a Mini like my daughter’s or the Cooper S I drove when the tyres were being changed on my car. Totally impressive to drive even in basic form, the Cooper S is a barrel of laughs and I’d have to give it away to make it depreciate as far as the Porsche.

Will I sell my dearly beloved? Maybe. Will I buy another new Porsche, unlikely. Am I a raving fan again….getting there

Porsche, customer experience | No Comments