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What is a customer intelligent company – and how can you become one?

22nd Nov 2016
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The following article is an abridged extract taken from The Customer Experience Book by Alan Pennington. 

Let’s explore the notion of the ‘customer intelligent’ company and consider how to give practical guidance to those serious about wanting to turn their intuitive belief into real programmes and then to make being customer intelligent an integral part of their business DNA not because it is fashionable or because it feels good to be ‘nice’ to customers, but because it makes sense from a company, an employee and their customers’ point of view.

The customer intelligent company uses all of its knowledge and connects the customer into the very heart of its operation and decision making – the customer intelligent company has a very high level of self-awareness of its position in its customers’ lives and is in tune with the rhythm of their lives.

So what are the characteristics of a customer intelligent company?

Ask yourself the following questions and see where you can honestly say, ‘yes we do that’:

  • A customer intelligent company understands the cost of failure in terms of its customer promise, for example how much time and budget you spend resolving what are often self-inflicted customer problems.
  • A customer intelligent company’s staff all know what experience they are required to deliver.
  • A customer intelligent company understands the precise points in the customer journey where value is either created or destroyed.
  • A customer intelligent company uses customer needs to actively design the critical interactions with customers.
  • A customer intelligent company monitors a range of key customer- outcome-driven measures and makes changes based on those results.
  • A customer intelligent company ensures all employees understand how their actions impact on the customer, including both frontline and back office teams.
  • A customer intelligent company spends enough time and resources to train staff to deliver on the customer/brand promise.
  • A customer intelligent company is making small course adjustments every day to improve the experience. In short, a customer intelligent company understands the value of connecting with a customer’s mind as well as their wallet and that to do the former you will improve your results in terms of the latter.

The concept of customer intelligence is nothing to be scared of, it is not a rebadging of CRM (customer relationship management), it is not about an IT solution (and all the financial pain that brought) – it is about using the wide range of information already available and using that information more intelligently to better inform how to deliver and what to deliver through the customer experience.

Remember, 95% of what you need to improve your customer experience will already exist in the company. The role of the customer experience team is to act as the catalyst, the connector and facilitator inside the company.

What we see across the globe is that it is increasingly the case that product offerings are closer to parity and more easily imitated, which means that creating and managing a positive and memorable customer experience is often your single greatest source of sustainable differentiation and therefore competitive advantage.

When you are recognised for your customer experience:

  • You are often seen as innovators.
  • Your stock performance is likely to be better than your competitors.
  • You will enjoy lower staff churn rates, which means you get to keep your best performers longer and avoid the cost in cash and quality of replacing key leaders.
  • The cost of handling complaints falls.
  • The company benefits from the free positive customer word of mouth and the associated ‘halo effect’.
  • Your customers are more willing to share ideas and improvements.
  • Your customers will bank a higher level of ‘forgiveness’ when you make a mistake.

Put simply, your customers would rather you existed than not – can you claim that about your company?

Preparing to connect with your customers

Back in 2004 in their book Building Great Customer Experiences Colin Shaw and John Ivens talked about their view that ‘the customer experience will be the next business tsunami’.

So what has held back the progress of customer experience?

The whole area has tended to be classified as ‘soft’. In some senses those of us engaged in the world of customer experience did it a disservice by not more strongly developing the financial links between the customer experience and business performance, this gap is now being filled quickly as more and more tracking-based evidence is emerging from respected sources including Forrester Research.

Education has also been a black hole with few training programmes making the leap from simple service training to the more encompassing customer experience agenda.

The make-up of the top executives across sectors has had an impact with a significant proportion drawn from the world of finance – these individuals while interested in the concept have almost to act against their likely personal profiles to enable them to embrace and really evangelise on the subject. It has become clear that without top-down engagement and belief then the customer experience will only ever be a small part of a balanced scorecard if it appears at all – at worst it will be a project given to someone in the organisation who has little or no chance of success, but at least they provide senior managers with a fig leaf to say that they are taking it seriously!

Education has also been a black hole with few training programmes making the leap from simple service training to the more encompassing customer experience agenda. Senior executive programmes rarely include the customer experience as part of the learning programme.

Thankfully the business world is ready to embrace a new future where companies become more ‘customer intelligent’, which essentially means that they structure and manage their businesses in a way that optimises all of the information available to them about their customers and effectively balance the commercial needs with their customer expectations, creating a true ‘win–win’ position.

If you make the decision to focus on the customer in your strategy it’s the start of a journey and the first question needs to be: ‘can we identify who our customers really are?’ So one of the start points is to ask: ‘Who are your customers and what do they look like?’

The customer value proposition

Having established what your customer looks like you need to begin to understand their relative importance in your company and your customer engagement model?

In traditional marketing terms you need to look at the customer value proposition (CVP) where your company is considering the three components of price, product and service – you can substitute customer experience for service. A CVP is ‘the promise that value will be delivered and the belief from customers that value will be experienced’.

A customer value proposition is ‘the promise that value will be delivered and the belief from customers that value will be experienced’.

It is not an advertising strapline or slogan and it must not make ‘benefit assertions’ that are not subsequently delivered or are so difficult for customers to access or experience that they are in effect meaningless.

Few, if any, businesses derive their CVP from an equal and high weighting along each of these three dimensions, as this is unrealistic. The CVP is determined by the relative focus on the three dimensions and while each of the three dimensions will be included one will always be dominant.

Having agreed on an enhanced role for the customer as part of the CVP your challenge is to find a means for delivering a differentiated experience in areas that the customer values, track performance and identify areas for improvement to effectively drive business performance.

Building up knowledge about your customers

In order to do that we need to understand how a customer experiences the company and where the key points of interaction are that will influence and then drive the behaviour of that customer.

The backdrop for this is a customer journey map (CJM) that is an ‘outside-in’ customer view of how they experience the sector, product or service. When you ask companies if they have this view of the world many will say ‘yes we do’. What emerges on closer inspection is that they have business process maps – these are not a CJM, they are an internal map of ‘what you do to customers’. Your company has the capability to take an ‘outside-in’ customer view and to create a customer journey map – it is there just waiting in the wings to be activated .

Your customer journey map becomes the pivot around which experiences can be both visualised and designed.

The problem is that we tend to play a game of pass the parcel with customers – teams engage only during specific stages and then the customer moves on to another department to be managed – in this way we create disjointed, compartmentalised experiences which feel disjointed to the customer.

The development of CJM approaches over the last 10 years has now provided ready-made structures both in the process of creating and then refining the output of a CJM to allow your company to connect the parts of the company involved in the various stages into one end-to-end journey. The visual CJM provides you with a common view of the journey for the first time, a critical step to gaining alignment across the silos of your internal teams and to begin to understand interdependencies across teams in terms of the experience that customers have of your company.

Your CJM becomes the pivot around which experiences can be both visualised and designed. It allows you to centralise into a single point information that will be held in different parts of the business – connecting data, information, people and processes.

Of course there remains a significant role for the underlying process mapping and engineering, but this should now be led by the customer journey map activity.

The impact of not being customer intelligent?

Let's consider an example of a business that is not displaying a customer intelligent approach. In a world where Disney continues to set the benchmark, this hotel has invested very significant sums in creating a potentially world-beating waterpark, both in terms of the physical rides and the advertising and marketing budget to promote it. Yet in terms of the end product, I would argue having experienced it that it is today a triumph of style over substance inexperiential terms.

The expectations are set high by the slick and expensive advertising campaigns. Having purchased tickets I arrived with my family and having navigated the crowds found myself at the entry to the park. First problem was that I actually did not have actual tickets, I had tickets to get a ticket that meant a queue of around 20–30 minutes that no one had prepared me for, to arrive at one of the handful of counter points. The tension levels and frustration were rising. Having got to the front of the queue it appeared the only reason for this secondary ticketing was to provide an opportunity to sell me more.

Having finally got into the park it was then unclear how it worked, people were wandering around with large inflatable rings – where did they come from, why do they have them, we wondered? Looking around there was no one to ask, not quite Disney where we would be falling over staff trying to predict that we needed something.

Next the signage: once you got to the top of the rides there were different queues and different entrances – again creating unwanted confusion about which one was the right one. Finally there was little obvious shelter from the blazing sun or measures taken to ensure that visitors remained cool. The irony of the lack of staff was that when you looked into the water channel that flows around the park there were plenty of staff on hand – one can guess that drowning is a bit of a risk in this location and would result in some rather bad publicity, staff are deployed to ensure this does not happen.

A customer intelligent company would recognise these visitor issues and act on them as they are damaging the brand. The points to note here are that expectations were created both by the company advertising and the personal comparison to other high-end attractions that are not delivered in reality at this resort. The investment was in the infrastructure and not the experience and these shortcomings were very obvious and resolvable. In the short term just communicating with visitors to better manage their expectations around ticketing and scripting the ticket office conversation to provide better basic information about how the park functions would be a quick win.

Alan Pennington is a global customer experience/redesign guru. He was managing director and co-founder of Mulberry Consulting, the Number One CX business globally. He has worked with a wide range of businesses, including Emirates, Vodafone and British Council. The Customer Experience Book is available now. 

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By Wilges
03rd Apr 2018 10:32

I imagine that being a customer centric company would solve the problem of worrying about whether you're intelligent about your customer's needs or not. My signs business in Sydney tries to focus a lot on what our customers want in their end product- we make sure that we are accountable at every stage of our banner and signs production to ensure that our customers and clients are fully satisfied and agreeable about what's going on!

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