Creating Better Customer Experiences [5]

[There are no traffic jams along the extra mile.  Roger Staubach]

The dominance of the service sector, global competition, rising labor and technology costs and demanding customers forces companies to create excellent customer experiences or fail. In the Now Economy, Companies must know their customer’s definition of service quality (SQ).  Organizations have to provide service experiences that meet or exceed customer expectations at a reasonable price.

It’s all about the service experience! Research has found that about 70% of customer defections are due to service problems. Customers evaluate service encounters to assess the quality of a firm’s offerings and whether they will continue do business with them in the future.  

Improving service quality is like taking vitamins, eating healthy and exercising regularly. Although the results may not be immediate, long-term benefits are significant. Managing service quality is not a “quick fix,” but rather a way of life for companies who are serious about improvement (e.g., Disney, FedEx, Ritz-Carlton, Singapore Airlines).

So, How Can We “Wow” Customers? 

Here are 10 recommendations that lead to superior customer value:

1. Co-create services with customers. Learn what customers value by incorporating the voice of the customer into the service development process.

2. Focus your improvement programs outward, on market breakpoints. By defining and mapping customer journeys, you can see the service experience as the customer sees it. Realize that customers view service as a totality, not an isolated set of activities.

3. Create a tangible representation of service quality. Hertz #1 Club Gold service communicates a premium, value-added bundle of services to business travelers seeking a hassle-free car rental experience.

4. Use teamwork to promote service excellence — service workers who support one another and achieve together can avoid service burnout.

5. Create a culture of service obsession based on key SQ determinants such as professionalism, attitudes/ behaviors, accessibility and flexibility, reliability/ trustworthiness and service recovery.

6. Develop metrics that are specific in nature, such as a 99% on-time delivery rate or an average customer wait time for telephone orders of less than 20 seconds. Benchmark best practices for each service metric employed.

7. Employee selection, job design and training are crucial to building customer satisfaction and SQ. The ability to respond quickly, competently and pleasantly to customers needs to be a priority.

8. Reward quality efforts in marketing. Seek opportunities to reinforce quality behaviors when they occur. Reward employees on the basis of commitment and effort, not just sales outcomes.

9. Think of service as a seamless process, not a series of independent functions. Service quality occurs when the entire service experience is managed effectively and efficiently and the organization is aligned to respond to customer needs whether it’s at the pre-sale, sale or post-sale.

10. Integrate customer information across all sales channels. The information made available to online and offline service representatives should be consistent. 

Checklist — How to Improve Service Quality

□ Does your company really listen to its customers? Give a specific example of how good listening improved the service experience.

□  Reliability means performing the promised services dependably and accurately. On a 10-point scale, where 1 is unreliable and 10 is perfectly reliable, rate your company and explain why.

□  How well does your company perform the service basics?”

□  How effectively does your company manage service design — systems, people and the physical environment? Provide an example of how lack of planning in one of these areas resulted in a “fail point” during a customer encounter.

□ Service recovery refers to how effectively companies respond to service failures. Cite an example when a service failure occurred and how it was handled.

□ Teamwork is an important dynamic in sustaining service workers’ motivation. How can you improve teamwork in your organization?

□ Internal service is crucial to service improvement, as customer satisfaction often mirrors employee satisfaction. To what extent does your company assess internal service quality?

This blog post is the 5th in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4^th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com , 954-309-0901, www.artweinstein.com .     

Enhancing the Value of Segmentation [4]

[You can drive your business or be driven out of business.  B.C. Forbes]

Does your company suffer from any of the following marketing deficiencies – fuzzy business mission, unclear objectives, information that is not decision oriented, lack of agreement as to segmentation’s real role in the organization, products/services that reflect corporate desires rather than customer needs, unfocused IMC strategy, and/or failure to attack niche markets and customize offerings? 

Over the years, many top B2B marketing executives have asked me how to build and implement a true segmentation-driven culture in their organizations. Based on my more than 20 years of experience as a professor, researcher, and consultant, here are a few of my thoughts on how to get the segmentation process in high gear.

1. Create a 1-day segmentation training workshop for the marketing group to generate excitement and stimulate project development. This will lead to a set of specific, market-based strategic initiatives and research opportunities. Bayer Diagnostics, Citrix Systems, Motorola and other companies have implemented such a plan. 

2. Begin with 3-5 small, focused and low-cost initiatives to demonstrate success and build enthusiasm. Realize that all segmentation projects may not be a resounding success (good news -- most will be if properly designed and executed). Cordis, a Johnson & Johnson company, benefited from the strategy of hitting many singles rather than going for grand-slam homeruns.  

3. Review previous segmentation studies and make sense of the summary reports. Via a meta-analysis methodology, a fresh set of objective eyes can add significant value to good work and extend segmentation reports buried in computer files or file drawers. At one time, Blue Cross Blue Shield of Florida had undertaken 18 segmentation studies with no synthesis, integration or strategic analysis.

4. As Intel learned, segmentation audits with marketing managers, channel members and customers can pinpoint current and potential problems as well as overlooked market opportunities and niches. 

5. Successful segmentation means being able to answer these 6 “what” questions -- what do you want to accomplish? (e.g., find new markets, get better customers, upgrade business relationships, align products to customer desires, create a segmentation model/typology, etc.); what methodologies will help you get the necessary information?; what is unique about your segmentation view of the world?; what is your budget?; what is your timeline?; and, what are reasonable expectations for the work?

I leave you with 5 thoughts to share with your management team to get them inspired and on-board to invest in segmentation thinking.

> I am convinced that market leadership is dependent upon how successful firms are at defining and selecting markets appropriate to their capabilities, resources and competitive situation.

> Segmentation findings provide a systematic basis for controlled market coverage as opposed to the hit-or-miss, random efforts of mass or unfocused marketing.

>Segmentation-based marketing is the essence of sound business strategy and value creation.

>Segmentation will continue to grow in stature as a fundamental marketing tool and foundation for marketing strategy in business organizations, large and small.

> A more thoughtful approach for market selection can assist marketers design winning target marketing strategies.

Realize that firms in all industry sectors are discovering the power of strategic segmentation as a marketing tool for attracting and retaining customers in fast changing, globally competitive markets. How about you?

This blog post is the 4th in a series from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com , 954-309-0901, www.artweinstein.com .    

Winning Business Models for the Now Economy [3]

[It ain’t that hard to be different.  Tom Peters] A successful business model describes how an organization designs and delivers value by providing stakeholders with a shared understanding of how the business operates. A strong business model offers a competitive edge by demonstrating that the firm does something different, more innovative, and better than its rivals. Realize that different isn’t always better, but better is always different. Sirius XM Satellite Radio is always on whether you are at home, at work, in your car, or at the beach. Many customers listen to SiriusXM eight to twelve hours a day! Apple’s iTunes is a great example of the changing music industry. In the past, record companies, distributors, and retailers controlled channels and profits, now the artist and platform (iTunes) has the market power. Newspapers have struggled to become information providers as their readers aged and defected to new media. Sound business models answer the following 3 questions: 1) where should we compete?; 2) how should we compete?; and 3) how can we monetize products, services, experiences, and ideas. According to Accenture, 80% of companies hope to grow by developing new business models by 2019.Consider these 20 business models as you evaluate or develop your business strategy.

Digital Business Models

1. Access: Customer usage not ownership (Spotify, Zipcar) 2. Bricks-and-clicks: Retail and e-tail (Best Buy, Target) 3. Bundling: Sell 2 or more products for a discount (Comcast, Microsoft Office) 4. Community of users: Users generate knowledge, solve problems (eBay, Wikipedia) 5. Crowdsourcing: Outsource to non-employees for solutions (My Starbucks Idea, Doritos Super Bowl Contest) 6. Experience: App-based service plans (ClassPass, Zeel Massage) 7. Free: No cost products/services, revenues generated elsewhere (Skype, YouTube) 8. Freemium: Basic service at no charge, enhanced services have fees (LinkedIn, MailChimp) 9. Long tail: Millions of products offered, most sell very few (Amazon, Netflix) 10. Marketspace: Digital marketplace of buyers and sellers (Alibaba, eBay) 11. Multi-sided markets: Serve multiple segments – e.g., readers and advertisers (USA Today, Visa) 12. On-demand: Services as needed (TaskRabbit, Uber) 13. Open business model: Companies share low cost options [way below branded] Linux, Qualcomm) 14. Pay for value: Customers opt to pay what they wish (Neighborhood café, Radiohead CDs) 15. Platform participant: Enhance platforms by creating user applications (Foursquare, Zynga) 16. Pure-play: Online presence (Blue Nile, Overstock.com) 17. Shaper: Open up new marketspace (Apple, Facebook) 18. Software as a service (SaaS): Deliver applications over the internet (Salesforce.com, ADP) 19. Subscription: Recurring fees for services purchased on a regular basis (Dollar Shave Club, SiriusXM) 20. Unbundling: Sell a single product from a set of related products (AT & T DSL, Windows Live Essentials) Think about the 7 questions below as your management team assesses your business model and market performance. 1.  Can you clearly explain your business model? 2.  What is unique about your strategy? 3.   How does it compare with your direct and indirect competitors? 4.   Have you broken any industry rules lately? 5.   Can you develop a more innovative and interesting business model? 6.   Will your business model win in the market? 7.  Does your organization truly deliver superior value for customers in the Now Economy? __________________________________________________________________________________________ This blog post is the 3rd in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com, www.artweinstein.com/, 954-309-0901 .

Customer Focus to Customer Obsession [2]

[There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. Sam Walton]

The above quote by Walmart’s founder said it best – business strategy is all about the customer! The customer-first message has spread to the workforce. During a recent one-week period, I was pleasantly surprised to hear three Millennials call me “boss” during routine transactions at the Fresh Market, Office Depot and Subway. The same week, I also got a “hey, chief” and “I appreciate you”. Yes, the word is getting out – the customer is in charge! Value-creating organizations demonstrate that they value their customers’ business.   

Customer orientation ascribes to David Packard’s (HP’s co-founder) philosophy that marketing is too important to be left to the marketing department. It is the responsibility of everyone in the organization. A customer orientation is a service organization practicing Japanese style marketing - putting the customer first. In fact, the Japanese word okyaku-sama literally means “honored customer” or the “customer is God.”  Is the customer really king in the U.S.? When leaving an American restaurant, sometimes one is barely acknowledged; in contrast, it is not uncommon at a Japanese dining establishment to have several parties graciously bow farewell in thanks for the customer’s patronage.    

 “We must be more customer focused, we need to create new market opportunities!” Undoubtedly, you have heard this management mantra or a variant of this theme recently. Executives use terms such as customer (or market) centric/driven/focused/ oriented and so forth to motivate their people to do a better job relating and responding to customers. While the idea is sound, too often it’s just lip service rather than a major investment to improve all facets of the organization. A true customer orientation changes the business culture to create and maximize customer value which in turn leads to an improved bottom line.

 Customer Commitment > Culture > Customer Value > Business Performance         

The healthcare market is fast growing and projected to be the largest employer in the services-producing economy in the United States. Globally, health care is a major challenge and vital industrial sector, as well. Many healthcare organizations, however, are slow adopters in creating superior value for customers. Successful healthcare organizations have embraced a customer-centered philosophy in the now economy – it’s not just about the care offered, but about the caring offered by service providers (physicians, nurses, technicians, front-desk personnel, and so forth.) 

Walk-in clinics or urgent care facilities are a relative new innovation in the industry as most consumers would prefer to not have to visit a hospital emergency room for a sprained wrist, flu shots, skin rash, common cold symptoms, or other minor maladies. Yet, some of these so-called urgent care centers may be viewed as semi-urgent, at best. They may be closed after 9 p.m. and on Sundays, their website says to call but no one answers the telephone, they have long waits for service, or are even ill-prepared to assist with basic medical issues since they are staffed by nurse-practitioners instead of seasoned physicians. In contrast, the Baptist Health System (17 centers in Miami-Dade and Broward counties) pioneered urgent care in South Florida more than 15 years ago and is all about the healthcare experience [www.GetTreatedBetter.com/]. Patients may call or e-mail ahead for appointments and have reserved free parking. Amenities include comfortable waiting rooms with large flat-screen televisions, wireless internet, and freshly brewed coffee and tea. An efficient expert team of highly skilled and compassionate doctors, nurses and technologists is readily available, and full service imaging services are provided, as needed.

Are You Obsessed about Your Customers?

Great companies such as Amazon and Apple are totally obsessed about their customers. Their CEOs, CMOs (Chief Marketing Officers), CCOs (Chief Customer Officers) and CXOs (Chief Experience Officers) stay awake at night strategizing how to improve the customer experience. They are masterful at creating and delivering value to their highly satisfied, loyal client base. Consider these examples: Federal Express changed its name and repainted its trucks to read FedEx, as that is what customers called them (“let’s FedEx this package to Zurich”).  Nordstrom’s sales associates have been known to buy products from a major competitor, Macy’s, to satisfy an unfulfilled customer’s request. Zappos, an online shoe and accessories retailer and an Amazon company, gives their customers a full year to return their product.

According to the 2017 Global Customer Experience Benchmarking Report by Dimension Data, 81% of companies stated that customer experience is their top competitive differentiator. Yet, only 13% of respondents acknowledged that their company’s level of service was excellent. Also surprising was the fact that more than 30% of organizations do not have anyone in charge of the design and delivery of the customer experience.

Forrester identified four levels of customer-centricity. These are: 1) customer-naïve companies, 2) customer aware companies, 3) customer committed companies, and 4) customer obsessed companies. Based on their research, two-thirds of the firms are customer naïve or customer aware (only 10% were customer obsessed). Therefore, a majority of businesses should restructure to implement customer-obsessed operations. Organizations will need to build a culture to mobilize around customers, high performing teams, developing technologies, processes, and metrics.  Forrester adds that customer-obsessed organizations such as Coca-Cola, HSN, and the Lego Group follow four guiding principles. They are customer-led, insights driven, fast, and connected. They define a customer-obsessed enterprise as, “one that focuses its strategy, operations, and budget to enhance its knowledge of and engagement with customers.” 

Realize that greatness in marketing and customer service is a function of attitude, not resources. Here’s how a local dry cleaner delivers exceptional value. I pulled up in front of the store in a South Florida rainstorm and the owner jogged out with a large umbrella to greet me and my clothes for drop-off. He stated, “I can afford to get wet, but not you!” Another time when I visited there for a pick-up, the store clerk quickly hung up the telephone when I entered. She said, “I was only talking to my boss, customers are way more important.” How’s that for mastering customer value thinking?

Other companies do not do a very good job in customer service - you probably can identify many of these firms. We have all been put on hold endlessly when calling for technical support, been ignored or treated indifferently when visiting a retail site, and sold inferior goods or services upon occasion. While second-rate firms may survive in the short term, they will not last in business unless they become value-creating for customers.

So, is your company truly obsessed about its customers? If not, WHY NOT? How can your organization design and deliver outstanding value to your customers in the now economy?

This blog post is the 2nd in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com, www.artweinstein.com/, 954-309-0901 .

From the New to the Now Economy ! [1]

[There are only two types of companies: the quick and the dead. Michael Dell] 

For more than 20 years, we have heard about the benefits, excitement, promise and impact of a digital revolution and a technologically-driven society. Concept albums by iconic rockers such as Radiohead (OK Computer), Rush (2112) and David Bowie (The Rise and Fall of Ziggy Stardust and the Spiders from Mars) sung about the all-encompassing power of technology – for good and evil -- before the new economy was born. And, a half century ago, Rod Serling relayed ironic tech-based themes in his brilliant television series, THE TWILIGHT ZONE (e.g., Time Enough at Last, Third from the Sun, To Serve Man, and so many more spell-binding episodes).

In the 1990s, Internet pioneers such as America Online, Amazon, Cisco Systems, Dell, eBay, E-Trade, Expedia, and Yahoo! dramatically changed how consumers and businesses bought products and services in a 24/7 global market space. A seismic shift in the new economy has taken shape over the past ten years led by the FAANGs -- Facebook, Apple, Amazon, Netflix and Alphabet’s Google. These digital leaders focus on speed, service, selection, sociability and solutions.

What has been the result of this 5-S transformation? Welcome to the Now Economy! Just as a toddler cannot possibly wait for a chocolate chip cookie and absolutely, positively must have it right now -- today’s consumers are equally impatient and demand immediate satisfaction. Hence, the rise of Amazon Dash, Fresh, and Prime; Apple’s iTunes; Couchsurfing; TaskRabbit; ZipCar; and a multitude of other “I gotta have it now!” business models.

Strategic differentiation combined with technology and consumers interest in choice has led to industry disruption. Marriott and Hilton have sure felt the effects of Airbnb in the lodging industry. Today, target marketing means segment-of-one personalization. Mass promotion has evolved into two-way dialogues with consumers and business users. Customer relationships lead to lifetime brand advocates. The new economy has morphed into the Now Economy!

The Now Economy is service dominant. This includes business, consumer, professional, and government services. Knowledge workers and the creative class turbocharge this economic sector. In addition, digital services (the platform economy) and consumer-to-consumer services have surged in the past 5-10 years. Realize that a strong traditional backbone of manufacturing, agri-business, construction, and infrastructure is still a key economic priority in industrialized nations. And, let’s not forget the trade segment (retail and wholesale), as well as the burgeoning e-commerce marketspace and the rise of smart products (e.g., appliances, energy regulation and the internet of things).

The 24/7 Now Economy is always-on and always open. Buyers will no longer accept shopping from 9 a.m. to 9 p.m. daily and noon to 6 p.m. on Sundays. Online shoppers will expect their orders to be delivered immediately, within the next two hours, or overnight (not in 5-10 business days). Bricks-and-clicks business models allow consumers to pick up their purchases at a neighborhood store. Sub-par customer service will not be tolerated. Buyers expect to be wowed with amazing experiences and will not settle for yesterday’s ordinary store visits.

Here's an example of the Now Economy in action.

I recently dropped my dogs off at a neighborhood pet spa for one-hour grooming services. I visit the Target Superstore down the street to grab a cup of dark roast in the mini Starbucks. The café is sparsely populated but employees (mostly millennials) drop by to consume premium coffee and pricy pastries. Occasional shoppers, largely female, young and old of all ethnicities, stop by to get their caffeine fixes, too. The fresh produce section in the grocery department is right across from me, part of the one-stop shopping experience. A hundred or so yards away is the embedded CVS Pharmacy -- once a formidable competitor and now a strategic partner. Paralleling the unstoppable movement towards online buying, I notice very few shoppers in this cavernous establishment. Is it any wonder that H.H. Gregg, Sears, Macy’s and dozens of other retail leaders have closed stores or went out of business? (The death of retail is a very real threat in the industry). I get a text message from the groomer – it’s time to pick up Maya and Payton.    

The Now Economy is also about sharing and access. Users are bypassing traditional market structures and business channels to work directly with other consumers to solve individual problems – think about an Uber instead of a taxi. The redefinition of buyer behavior has spawned a vibrant consumer-to-consumer sector and impacts the future of work.

While most of us would love to be like Tim Ferriss, rich and only work four hours a week, such incredible wealth is unlikely. In the Now Economy, many individuals are turning to multiple entrepreneurial ventures to pay the bills to survive or thrive. Just as struggling musicians work hard and hope for that big break, many millennials (and others) are juggling multiple gigs such as driving for Lyft, creating apps, writing blogs, posting YouTube videos and starting innovative businesses as they seek the “big deal” and navigate their individual paths to success.

Consider:

 1. What impact does the Now Economy have on your personal life?
 2. What impact does the Now Economy have on your professional life?
 3. Is your company truly creating superior value in the Now Economy?
     If not, what strategic changes are called for?
 4. Identify 1-2 other companies that may ascend as a potential rival(s) to the FAANG giants.

This blog post is the 1st in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com , 954-309-0901, www.artweinstein.com .