Monday, October 7, 2019

My Hotel Light Switch and the Three Easy Questions to Ask About Customer-Centric Innovation

I checked into a hotel late last night after a long evening of travel. When it came time to go to bed, I was unable to locate the switch for the lamp over my desk. I spent five minutes testing every switch, feeling the underside of the ledge over the desk, and searching behind curtains for hidden switchplates, all in vain. Finally, I made an awkward call to the front desk to ask how to turn off the lights.

The response from the front desk sounded unsurprised and well-practiced. Look for a white button on the desk she told me. The magic button that controls the desk lamp is this:
 


Maybe I should’ve realized this was a light switch. Perhaps not. What I do know is that I am far from alone. The front-desk clerk shared she gets several calls a night from frustrated guests asking the same question. “There are no instructions,” she added, demonstrating a firmer grasp of usability concepts than this hotel chain’s innovation team. (How many guests, I wonder, go to bed with the lights on because they’re too embarrassed to ask.)

This left me pondering why so many brands get innovation so wildly wrong. Just 3% of users who enable Alexa or Google voice apps are active users a mere two weeks later, and 75% of downloaded mobile apps are opened only once. When your brand makes investments into innovative customer experiences, is that the kind of adoption and success you seek?

The problem with too many innovation efforts is that brands focus on the tech, not the customer. By failing to be customer-centric in their thinking, brands end up with “solutions” that do nothing important for customers, leading to depressed usage and disappointing KPIs. It may be fine to pilot new tech simply to gain knowledge, but wouldn’t it be better to achieve that same knowledge while simultaneously creating something customers want?

Customer-centric innovation requires answers to three fundamental questions before committing to development. To learn the questions and explore why this hotel's innovative button fails the customer-centric test, please read the entire blog post on Gartner.com.

Sunday, August 4, 2019

Measuring Loyalty: Attitude versus Behavior

Photo by Cory Bouthillette on Unsplash
Customer experience (CX) leaders are called upon to lift customer loyalty, which, of course, means they have to measure loyalty. There are two broad ways to measure customer loyalty: Attitudinal measures and behavioral measures. Too often, CX leaders lean on one or the other, but delivering reliable CX results requires both.

Attitudinal measures are used to understand how customers feel about your brand. You collect attitudinal data via Voice of the Customer (VoC) surveys that ask about the customer’s satisfaction, likelihood to repurchase, or willingness to recommend.

Behavioral measures are used to measure if customers are acting on their feelings of loyalty. You measure behavioral loyalty using transactional and sales data. Do my customers continue to purchase? What is their purchase frequency or average order amount? At what rate to I retain or churn existing customers?

Many organizations believe that behavioral measures are most important. After all, what good are customers who feel loyal if they don’t act on that feeling? In the end, you take behavioral measures of loyalty to the bank--it is nice to get a high Net Promoter Score, but it's customers' behaviors that provide the dollars that drive business results.

But while behavioral measures are vital, there is considerable risk in relying on these transactional measures in the absence of attitudinal data. Repeat purchases may look like loyalty, but they can be driven by factors that are not related to customers' feelings of brand loyalty. People may repeatedly buy out of habit, because of limited competitive options, for convenience, or because your brand offers the lowest price. A brand focused only on behavioral loyalty metrics may gain false confidence that all is well because customers are repurchasing, only to learn how little loyalty the brand earns when it tries to raise prices or a better, more-convenient or lower-price competitor enters the market. Behavioral measures tell you what customers are spending, not what they feel toward the brand.

The taxi industry offers a recent and compelling example of the risks of relying only on behavioral measures of loyalty. For decades, taxi companies owned the on-demand transportation market. Protected by regulation, they were the only option for travelers and urban residents in need of a quick ride. No one liked taxis, but they used them, so the industry’s behavioral loyalty looked great—until Uber and Lyft entered the marketplace. Customers who felt no loyalty to taxis rapidly shifted to the new entrants. Had taxi companies collected attitudinal measures of loyalty and addressed the reasons for customer dissatisfaction, the industry might have enjoyed stronger customer relationships and mounted a more effective defense against the upstart network transportation companies.

Another problem with leaning on behavioral measures is that this data is a lagging indicator. Using purchase data to measure loyalty, you can only measure a lost customer after they’ve left. As a result, behavioral loyalty data can let you know if your retention rate is declining, but it isn’t predictive of what you can expect in the future, which customers may be next, and why they are abandoning your brand.

Behavioral data may be closest to the dollars and cents of business, but attitudinal loyalty data (quantitative survey data appended with qualitative research) is even more powerful for understanding customer perception, feelings of loyalty and emotional bonds, and what adverse factors can be addressed today to reduce customer churn in the future. Smart brands use their VoC survey results to identify which customers are most at risk and target them for unique retention and recovery efforts, helping to improve loyalty and reduce turnover.

When measuring loyalty, smart CX leaders don’t lean on one kind of measure over another. By collecting and analyzing both behavioral and attitudinal loyalty, you are best prepared to identify likely causes of customer churn while also measuring the financial costs and benefits of delivering better customer experience.

Wednesday, July 10, 2019

Omnichannel Customer Experience Is More About Your Organization Than About Your Technology

Photo by Thomas Q on Unsplash

There is a lot of focus today on omnichannel marketing and engagement, but brands would be well advised to focus first on omnichannel service. Getting omnichannel service right is not just a tech problem; far from it. In too many of today's customer interactions, organizational silos are evident, channel adoption and maturity is variable, brands' self-interest is apparent, and employee training and empowerment is weak. All of this contributes to a fractured customer experience that undermines trust, loyalty, satisfaction, and advocacy.

This was brought to mind as a result of a rough experience I had with a telecommunications provider. In the end, I am happy with the services and where we landed, but getting there--whew, what a frustrating and unpleasant ride.

I moved to a new home, and I used the telecom provider's website to purchase a set of services, including a set-top box, a channel and movie package, and internet services. The installation process was tortured, and it didn't need to be:
  • Day One: The installer comes to my new condo. She can't find a way to wire a set-top box adjacent to my TV, tells me I needed a rewiring specialist, and promises to arrange the appointment.
  • Day Two: The technician who is about to arrive calls and asks if I've been rewired. I tell her that is what she's supposed to do. She cannot--she's only an installer. Someone entered the wrong data, so I need to reschedule, yet again.
  • Day Three: I need to wait two days for a rewiring specialist, but in the interim, I reach out to the company on Twitter and ask if there is a streaming option that would avoid the time and hassles of rewiring. There is, but Twitter support cannot help. I need to call.
  • Still Day Three: I call the company and learn there's an easy streaming option using my provider's app on Roku. So, I cancel the rewiring appointment and replace it with yet another installer visit.
  • Day Four: While we've changed the appointment schedule, nothing has changed with the services I ordered, and I wonder if I have the right package. So, I reach out to Twitter support and ask. They cannot help and tell me I have to call.
  • Still Day Four: I call and speak to a person who confirms the package I ordered will not work with streaming. After a lengthy discussion, I settle on the right streaming package. I assume I'm done, but nope, the person to whom I'm speaking cannot make the changes. I need to talk to a sales rep, and so I'm transferred.
  • Still Day Four: Another long and torturous discussion ensues, and it seems to me the salesperson with whom I'm speaking did not review the lengthy and detailed notes captured by the first rep. After almost 55 minutes on the phone, I finally have the original order canceled and the new streaming services set.
  • Day Five: I'm frustrated and angry, but this is the turning point. The installer arrives, and installation goes fast. Roku and the provider's app work like a charm. Everything is right with the world.

All's well that ends well, or is it? To explore the adverse impact of this experience and why this company needs to focus not just on tech but on org structure, job descriptions, employee empowerment, and product complexity, please finish reading this post on my Gartner blog.