Thursday, February 26, 2009

What is Customer Experience Management?

My job title is Director, Customer Experience. So what do I do? Better yet, what am I supposed to do?

My background includes organizational development and strategic human capital management (often called talent management, but not the kind that represents entertainers). In those roles I would approach this problem by completing a job analysis. I might use the Hay Methodology or I might use critical incident debrief or I might just Google for awhile to get things started. Of course, the path of least resistance is to search the Internet so that it where I started when I was hired.

Now, I know that I was hired because Silver Hill Financial likes to capture strong talent when they find it on the street (and then figure out how they can add value) and they liked my work with customer-impacting processes, systems, and people while at PQS, Mundo Strategies, and Royal Caribbean. What I did not know about was this field called Customer Experience Management that they kept talking about. They had a few specific projects that were assigned to me right away. I filled the rest of my time with understanding the business and researching CEM.

What I found was fairly interesting. Clearly, the field of Customer Experience Management is fractured or simply immature. So many vendors of so many disparate products and services were all claiming to be CEM experts and service providers (e.g. ResponseTek has Google's current #1 ranking but only sells opt-in surveys and analysis). However, each of them had very narrow views of what CEM is. (Their definition of CEM just happened to be exactly aligned with what they were selling, but I am sure that must have just been coincidence.) I learned that:
  1. CEM is really just another term for Customer Relationship Management (CRM) - at least that is what Wikipedia would have me believe.
  2. CEM is really NPS (net promoter score) according to Fred Reichheld's fans.
  3. You can get a certification in CEM, which results in a lot of ideas.
  4. CEM is "the process of strategically managing a customer's entire experience with a product or a company" according to brand guru Bernd Schmitt.
  5. CEM "represents the discipline, methodology and/or process used to comprehensively manage a customer's cross-channel exposure, interaction and transaction with a company, product, brand or service" according to prolific blogger Leigh Duncan.
  6. CEM "combines research insights and experience design expertise to measure and enhance each of these "moments of truth," based on what is most important to the customer"according to LRA Worldwide, which seems to have the most complete view of the work that needs to be done.
The deeper I dug, the more I turned up. If you are in the customer service department then your vendors are telling you that they have Customer Experience Management solutions. If you are in marketing then your vendors say the same thing. If you are in product or store design, the same. Call center, the same. Sales, the same. IT, the same (especially if you are in charge of the company's Internet or mobile phone site). HR, the same...

HR, you ask? Well, yes, HR is the department that makes sure you hire, train, and reward people that deliver exceptional "moments of truth". If you don't believe me, just ask the HRIS software vendors!

However, I also found vendors that are starting to use research to point out that competitors are not being accurate in their claims of Customer Experience Management excellence. For example, the call monitoring companies that claim to provide the best CEM solutions started attacking the CRM software vendors by pointing out Gartner research showed that 55% of CRM implementations actually drive customers away. (See my favorite CRM demo here.) Vendors of alternative survey questions have attacked NPS. Customer service solution providers have been attacked because the teams they serve are often called after a service failure, which is reactive instead of proactive. In fact, if you look for articles that debunk Customer Experience Management or attempt to expose the myths, you can spend several hours reading online.

I am left with my original question. What is Customer Experience Management? It seems that the answer is short, but very broad. Customer Experience Management is the active management of all aspects of a company that have any impact on the customer at all. Suddenly, we realize that decisions made by executives that lead to lower employee morale have an adverse impact on our customer's experiences. When we inadvertently put incorrect information on our website or a press release then we have hurt the experience. When we actively monitor references to our company in the press and online we are engaged in CEM. When we ensure that new hires who may contact or be contacted by our customers have the right "price of admission" competencies we are managing the customer experience. When we record and score calls made by our contact center we are actively managing the experience. When we streamline a process that reduces cycle time by 3.4% we have improved our customer's experience. When we switch to recycled plastic containers because research indicates that our most profitable customers are "green" then we are using great customer experience management. The list goes on and on. CEM requires a passion for the customer's experience by the company's executives and everyone else. It has to be ingrained in the culture and a part of every decision. That is what Customer Experience Management is.

Wednesday, February 25, 2009

Did Customer Experience Management Die With The Economy?

I was doing a little research ahead of my conference session at The Customer Experience and Engagement Event in Orlando this April. As I was looking for prime examples of exceptional customer experience I noticed that many of the companies that excelled at managing the experience (defined as driving not just loyalty, but advocacy) have been having serious troubles. One of the most notable is Starbucks, which exploded with stores after 1987 and is now falling apart at the seams. Starbucks survived the dot com bubble burst and a few of the other bumps along the way, but now it is in serious trouble despite continuing to deliver a superior experience.

Is the price of the exceptional experience no longer worth the cost? Consumer confidence is way down, unemployment is way up, and the stock market is in full of big, ugly, burly bears. However, capital is now in short supply and that may be just as important as the human side of the equation. With over 50% of all loans being made by investors (did you think banks were loaning the amount of money that was growing out economy over the past 20 years?), and those investors on the sidelines or wiped out, people simply don't have the money in their bank accounts right now. Most people are not cashing in their 401K's right now, but they look at their statement and realize that they have lost upwards of 60% of their retirement funds. This deadly combination of real and perceived losses and future risk is hitting the experience economy companies where it really hurts, the wallet.

What businesses are doing well right now? Discount retailers, fast food, trash collection, and mortuaries. As long as people keep having babies, the last two will always be growth industries, but the first two are signals that people are cutting way back on expenses. New terms have entered our lexicon to express our desire to avoid major expenses (e.g. staycation). We are fixing our old cars instead of buying new ones. I have even heard of people buying books instead of going to the movies (gasp)!

Meanwhile, the companies that prided themselves on having the most addicted customers in their industries have been badly hurt by the cost associated with producing such a fabulous experience. Just look at this year's nominees for Fast Company's Customer Experience Awards (yes, these are the nominees for the October 2009 issue):
  • USAA is consolidating locations, which will result in fewer jobs as employees refuse to move
  • Build-A-Bear is cutting costs and eliminating Friends 2B
  • Virgin Atlantic is eliminating 7% of its workforce despite also leading all airlines with a score of 90.8 in the Market Metrix Hospitality Index (MMHI)
  • One of W Hotels' properties is in foreclosure (but is not expected to close)
  • At least Cabela's is having a banner year (due to gun sales, which you can interpret any way that you want); Kiehl's is expanding in the Americas; and Zappos is still selling shoes like hotcakes after busting a $billion last year
To be fair, companies must look for every available opportunity to become more efficient as consumer consumption drops precipitously. Business Week prefaced its entire section in last week's Customer Service Champs with the heading "When Service Means Survival". Then they open with an example of how Hertz is killing its reputation with loyal customers after a ~4,000-person layoff. The question that companies need to be asking themselves is, "How do we survive this downturn without losing our advocates?" The answer to that question will help drive decisions that will lead to long-term viability, not just cuts that appease the Board of Directors.

Thursday, February 19, 2009

The Importance of Your Online Reputation

Many moons ago I heard a piece on NPR about online eyeglass vendors. I have been wearing glasses since college and have always disliked the process of buying new glasses every time my prescription gets updated. First, I don't appreciate the pressure put on my by the optometrist to buy those glasses immediately from his/her retail store. This pressure comes in the form of withholding the written prescription until after I browse their selection. Second, I don't like the fact that the frames that actually look good on my face are ten to thirty times more expensive than the ugly ones, yet they use less plastic and metal in construction. According to Daniel Pinkwater, I finally have an option if I can only get my optometrist to give me both the written prescription and a number known as pupillary distance (the distance between the pupils of my eyes).

I did a great deal of homework because I had just filled my latest prescription and was about nine months away from visiting the eye doctor again. The Internet is full of debates and articles that are for and against buying prescription eyeglasses online, as well as articles that are just informative about the online retailers and how they are leveraging the Internet. I found that there were nine very popular companies and perhaps 25 smaller players, many of them overseas. Given that the big nine have had a great number of customers, they also had a large number of very vocal detractors. Some chose to confront the dissatisfied customers head-on by responding to the complaints wherever they were listed, while others simply ignored them. What did this tell me, as a potential customer, about what I should expect from these online vendors?

The big nine are rated and reviewed all over the Internet. Some examples that I found useful include:
39DollarGlasses
EyeBuyDirect
EyeglassDirect
GlassesShop
GlobalEyeglasses
Goggles4U
Optical4Less
SelectSpecs
ZenniOptical

There are also comments about or by some of the other vendors:
BestPriceGlasses
Discount-Eyeglasses

In the end, I chose to test three online vendors with inexpensive orders. I purchased glasses for my wife from EyeBuyDirect.com because she found a frame that she loved and they could make her prescription (her prescription is outside of many vendors' ranges). I purchased glasses for myself from Discount-Eyeglasses.net because they were the least inexpensive total package ($26 included shipping) and from BestPriceGlasses.com because they had the cheapest progressive lenses ($52.40 included shipping). Look for the actual transaction experiences and my opinion of the products in future blog entries.

Friday, January 23, 2009

Measuring the Customer Experience: Word on the Street

In this brief series I will cover some of the metrics that have qualitatively and quantitatively been used by companies where I have worked. Let's start with the most basic one that many companies have used for many years, but never formally quantified.

Many companies have someone in the marketing department or have hired a service to provide the executives with daily or weekly clippings. Today many executives simply have a Google Alert set up with the name of their company and competitors. The goal of this activity was to get a sense of how often the company or its competitors were showing up in print. The executives rarely read these clippings, but evaluated the clippings based on heft (weight or volume). If the company was in the news then at least the name was in front of people.

The second generation of this exercise became more of an evaluation of the reason that the name was in the news. Some companies simply looked at whether the news was generally positive or negative. If Marketing was dinged for an abundance of negative articles then it was common for them to put a positive spin on almost every clipping. Some companies went so far as to create a scorecard that showed how many positive vs. neutral vs. negative hits belonged to the company and each competitor. However, in the end this really did not result in any action beyond a phone call or email to the head of Marketing.

Special services (news and mention aggregators like http://startpr.com) appeared on the scene a couple of years ago and started to provide even more detailed analytics. They take the process beyond passive receipt of Google Alerts and allow your company to start tracking every conversation that people all over the social web are having about your company. At Silver Hill Financial we became progressive enough to actually reach out to the people having these conversations and addressing service failures head-on. Our Customer Experience Management Team partnered with a couple of people from our PR Team to identify and act on the negative comments and threads. We also found it possible to track down blogs and postings that were using our company name to attract traffic, but who were not actually discussing our company or products. (Almost always those sites were filled with pay-per-click links to adult websites.) We were able to attract positive comments about our service recovery on nearly 70% of the pages where we had been drug through the mud and we were able to get every single bogus blog taken down that had our name posted somewhere in the text.

I am fortunate enough to be in a progressive company that wants to actively manage our online reputation. Whereas I had once been the recipient of the clippings (photocopies of articles about motor oil companies) that were never actioned or discussed, I am now able to leverage a very modern and robust metric that is actionable.

Thursday, January 15, 2009

The Least Worst Candidate

Full Disclosure: I have led strategic human capital management teams as a consultant and executive for 14 years...

The greatest threat to your company's customer experience is the least worst candidate during new employee selection. This is especially true in companies that are quick to hire and slow to fire.

Do you have an immediate opening that you simply must fill as soon as possible? Is it also a strategically critical role for your organization? Chances are, companies that find themselves in this situation also rely on very traditional HR practices and will put an ad on the popular job boards as well as the local newspaper. Hundreds of candidates will flood the desk of the person who is responsible for posting jobs. He or she will sift through them looking for key words on the resumes. Then a select few will be forwarded to the hiring manager for consideration. The final pool will be called and invited to interviews the following week. Then the candidate with the best interview will be chosen by the hiring manager and will start in two weeks. Sound familiar?

The new hire is given office supplies, gets a company email and intranet access after a few days, and spends much of the first week shadowing or meeting with other key employees. Then it is off to the races. The first few problems are attributed to the employee's newness and the training team is called upon to provide some solutions. However, the problems continue so it is clearly the ineffective trainers who are at fault now. None of the customer complaints have moved up the chain of command so the hiring manager is still comfortable that things can be turned around once the new hire gets some more experience. However, the new hire is now learning how to prevent angry customers from reporting their dissatisfaction instead of trying to mitigate or solve the customer's concerns. While the new hire is supposed to "deliver the wow", instead he or she is "delivering the ou(ch)". The new hire is starting to find ways to circumvent the company's policies and procedures, work the system to maximize personal income, and stay one step ahead of any reports or awareness of service failures. When the boss finally catches on to some of the games, instead of managing performance (which would involve uncomfortable conversations, possibly conflict, and annoying paperwork and HR involvement), the hiring manager simply reassigns the most upset accounts to another employee. After all, this new hire was the best of the entire crop of hundreds of applicants, right? Now that he or she has all of this experience and training the boss needs to find a way to make this work, a place where this new hire fits.

But what if you could avoid hiring the least worst candidate altogether? What if you already had a strong pool of external candidates waiting for openings in your organization? What if you already had a pool of internal candidates that were proven performers, high potentials, a great fit for the skills you need, and ready for the challenge? World-class leaders in talent management don't worry about sudden or unexpected losses. They already have a plan in place to back-fill every critical technical and leadership role in their organization. You will also find that these organizations have the happiest and most loyal customers.

First, and foremost, every employee should be recruiting for your company all the time. Your company should have a strategy in place that clearly states that your existing employees should be looking for like-minded individuals (passionate, brand-champion, hard-working, loyal, top performers). And that when they meet those potential candidates, that your employees have a great elevator pitch about the fabulous work environment and opportunities that exist at your company. The marketing of your employer brand is the most critical part of your attraction strategy. It is not always enough to have a lot of people wanting to work for your company, they need to be the best people and the right people. Ask your HR team about your company's sourcing and attracting strategies. If they don't drive a constant buzz on the street and hits on your jobboard, then you need to help HR fix this shortcoming.

Second, you should know the competencies that drive best practices that lead to meeting and exceeding your company and team's strategic objectives. HR should help you build a selection strategy that includes a process by which candidates for a position are screened multiple times, narrowing the choices down to the internal and external candidates that are the best fit and ready for the challenge. The typical tools that are used in world-class selection processes include an initial phone screen by HR that asks about a candidate's knowledge about the company, team, and position; a validated simulation that is scored by a trained incumbent; a competency-based behavioral interview by the hiring manager; and a written or online assessment of aptitude that is based on work behaviors. The "price of admission" competencies that you are using in this screening process should include knowledge, skills, experience, aptitude, physical and mental abilities, and personal traits that are difficult to teach (almost innate) or commodities (so many people have them that they are not taught by your company).

Third, your company should never be caught off guard. HR should have guided senior and mid-level leaders through a workforce planning exercise that resulted in a clear picture of the company's bench strength for all key positions. Evidence of effective workforce planning efforts would include career path maps or ladders, individual development plans that focus employees on the competencies required for their next role, and succession plans or maps for senior leadership positions. This is not the 1950's, no one should expect employees to devote their entire career to one company. In fact, that would not be healthy (no fresh ideas or diversity of thought and opinion). Turnover should be expected (and for some it should be encouraged) and planned for. Companies should clearly know how deep they are at each critical role and who the most likely successors are. When a position becomes available, the best candidates should be encouraged to apply (along with other interested internal and external applicants).

Don't get caught hurting your customers through bad hiring decisions. The techniques and best practices that lead to the right person with the right competencies doing the right work the right way at the right time have been researched and found to be applicable to companies of all sizes. You can rescue your customers from the least worst candidate.