Seven lessons from RICOH Canada's journey to customer-centricity
The president of RICOH Canada shares advice to companies that are just getting started on their customer experience journeys about what he learned on his organisation's own path to CX excellence.
I complain a lot about companies that get customer experience wrong. Today, I am going to take another angle and explore how one company has taken on the customer experience journey and gets it right.
RICOH Canada has done some incredible work in improving customer experience. They increased their Net Promoter Score® (NPS) by 34 points over 30 months and enjoyed a 10% increase in sales. Since this initial 30-month period and increase in NPS, their score has climbed another 15 points—and they are not done yet.
Glenn Laverty, president, and CEO of RICOH Canada, and SVP strategy RICOH North America was our guest on a recent podcast, and he explained why and how they did it. He also explains what new challenges they have today and how they are going to address them. Finally, he shares with companies that are just getting started what he learned on RICOH Canada’s customer experience journey.
The RICOH Canada backstory
It all started because printer sales were declining as an industry about 12 or 13 years ago. A marketplace that was already competitive was becoming even more so.
Unfortunately, the industry as a whole had not done an excellent job with product differentiation between the different tiers of providers. Customers, as a result, had commoditised the product.
Laverty, who then was EVP Direct Operations for RICOH Canada, saw that they needed to differentiate themselves from the competition. Since the hardware wasn’t going to do it for them, they decided to distinguish themselves with customer experience.
“We felt that we would be tapping into that emotional component of a decision that customers were involved in,” Laverty explains.
People always ask me whether emotions apply in business-to-business (B2B) customer experiences. They do. Laverty agrees, adding that when you reflect on the decisions you make in business, you can see how emotions influence your decision about whom to give your business. Moreover, realising the power of emotions in the B2B experience renews your commitment to improving that relationship and your customer experience.
Changing the prevailing attitude requires persistence and leadership
When you implement a Customer Experience programme, the common problem is that some of the team feel like this programme has nothing to do with them. They feel like because they don’t work directly with customers, they don’t affect the customer experience. However, as my regular readers know, every part of the organisation affects how the customer experience is.
Laverty says that as an organisation, RICOH Canada was focused inwardly on tangible and “executable” terms of establishing themselves in the marketplace. At times, Laverty felt like the lone voice encouraging the organisation to turn the focus on the customers instead of on operations.
Laverty persisted as he saw that customer experience would be the differentiator in the marketplace. He asked, “How is this going to impact our customers?” about every decision made in the boardroom. It was part of his strategy to enforce the customer-centric mindset at the company and help the team get used to identifying as the customer and seeing it from their vantage point.
They initially estimated there were around seven touchpoints for the customer across the organisation that affect customer experience. However, they soon recognised that it was a mistake. Every department within the entire organisation had a direct or indirect impact on customer experience, from the technical service technicians that worked with customers to Accounts Receivable to Logistics.
“For example, if somebody puts a product into a box and doesn’t put enough packing into it and it arrives damaged, or it arrives to the wrong address, then, quite frankly, that’s as big a deal for us as if we just never answered the call when the customer was contacting us,” he says.
Once they understood this concept, customer experience became the responsibility of the entire organisation. All 2,200 employees within RICOH Canada had a duty to deliver an exceptional customer experience, whether directly or indirectly. Laverty says everyone recognised the need to raise their game and change customers’ perception of the organisation. “We needed to show we were better than the rest,” Laverty says.
The prevailing attitude at the company before undertaking the new customer-centric philosophy wasn’t all bad, however. Part of the reason that Laverty had such success with his programme is RICOH Canada already had a sales mindset. Everyone sells at the company, and everyone is part of the sales organisation. So, moving to a customer-centric culture was easier for them to adapt to and adopt, Laverty says.
“The other key element is that it’s human nature,” Laverty explains. “People want to belong to a cause.”
Laverty says that inside every single person in the organisation today is a duty to deliver an exceptional customer experience. They “belong” to what RICOH Canada stands for in the marketplace. It has become the rallying cry for the organisation and something they still talk about all the time.
Later, as CEO, Laverty instituted an incentive that rewards at the individual level, the team’s success in customer experience. He tied everyone’s short-term incentives to their performance against the plan for the customer experience using the NPS score improvements to measure it. Laverty says that this tactic simultaneously solidified the team’s commitment to the idea but also defined the values of the organisation in a new way.
Customer experience is an ongoing programme with new challenges
Laverty says the company is still evolving in 2019. There have been several acquisitions over the previous years, and now, around 25% of the business is in services unrelated to print. As a result, RICOH Canada brought many people into the organisation who “didn’t necessarily have the same zeal around delivering an excellent customer experience.”
Moreover, the industry is changing. RICOH Canada has adopted technology to create efficiencies within the organisation. In other words, there are fewer people involved in the “back-office” areas than in the past.
All the change has presented new challenges. One of the most significant is a decrease in employee engagement. For example, one concern raised in employee surveys is that with the company changes, employees don’t feel “up to speed” with the company direction.
“We are concerned because we fundamentally believe that we cannot deliver an exceptional customer experience without a highly engaged employee base,” Laverty says. “So, our employee engagement levels have now become also part of our focus. We’re taking a deeper look at the connection and renewing our commitment to how we approach that.”
RICOH Canada is responding in several ways to this new challenge to the customer experience. For example, Laverty says they are investing in a tool to improve communication within the team about the direction of the company, particularly between managers and direct reports.
RICOH Canada also engages in Verbatim Zone Employee Engagement surveys. They break down the feedback they get back from employees by region and department to determine priorities for fixing problems in the employee experience. Then, the executive team engages in regular communication to address specific issues raised by the various departments.
Another way they are addressing the change in employee engagement is to have a local management council, which is made up of a cross-section of departments. Laverty tasked a member of the Executive Management Team to improve employee engagement and has him liaise between the local management councils and corporate.
Improving employee engagement is a crucial initiative for Laverty’s entire executive team as well. By making it part of their KPI (key performance initiatives), he encourages them to act on what they can to improve employee engagement at a regional level.
Seven things to remember on the customer experience journey
I asked Laverty what he would say to organisations beginning the customer experience improvement journey. He had some advice that could help:
- Don’t allow the shock of your initial scores demoralise you. Laverty says when you get the truth from customers, it can be a lot lower than what you think it should be. He describes RICOH Canada’s first NPS score as “absurdly low.” (They have been in the mid-70s for many years now, an improvement of over 50 points from those original scores.)
- Use the score as the drumbeat for your motivation. Laverty says their low score was a beacon for their resolve to improve. He was continually communicating what the team was doing to improve it and celebrating successes along the way as the number began to climb.
- Remember the needle moves slowly. It takes time to change the direction of a medium to large-sized organisation. Be patient and celebrate the little wins along the way.
- Recognise how actions affect your results. This advice goes both ways. Laverty says you should see how your past actions harmed the customer experience and work to improve those moments. However, you should also take note of what works well. For example, one of the initiatives they employed called field activated customer experience resulted in a five-point bump in their NPS, which was extraordinary.
- Don’t be surprised when you hear you are not doing a good enough job. Instead of getting frustrated that your actions aren’t getting the results you expected, take the feedback as an opportunity to fix what isn’t working.
- Be consistent. customer experience isn’t a short-term project. It is not the sort of thing you can “jump on the bandwagon” for either. It’s a long game. Laverty has been playing it for over 13 years, and he’s still playing.
- Make customer experience improvement numbers a KPI. If you don’t measure and reward your performance, it’s easy to lose momentum in customer experience enthusiasm. Tie hard numbers into your incentives to ensure you keep the team on board with your agenda.
If you want to read more about RICOH Canada, please download our White Paper Case Study on their performance.
So, what’s the remarkable secret to their success in CX? RICOH Canada is an excellent example of what is possible when senior leadership believes in and supports a customer experience programme. They also demonstrate how it takes time and resources to make a programme work. In addition, it shows that you must always adjust and refine your experience as things change.
Most of all, it shows that customer experience is not a destination. It is a process, and there is always something new that needs your attention.
Improving thecustomer experience works, and it is worth it. Laverty says that RICOH Canada has fantastic retention rates of customers. It is far superior to the average for the industry. He and the team at RICOH Canada believe it is because of their commitment to producing highly-engaged employees who deliver an exceptional customer experience.
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Hear the rest of the conversation on RICOH Canada’s Case Study on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here.