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Thursday, January 22, 2009

Tiffany and Costco - Delivering on Value
Forrester recently released their Customer Experience Index for 2008.  The fact that Barnes & Noble received the top performance rating was interesting. The fact that Costco and Hampton Inn/Suites tied with Borders and Amazon for third place (ahead of hundreds of other corporations) is even more telling.   

The Costco performance provides another reminder of how important it is for corporations to understand customer expectations and the value equation that they are delivering.  Costco is far from warm and friendly and the checkout lines can at times be lengthy, but the stores are neat, clean and well- organized, and the prices are relatively low.  Similarly Hampton Inns don’t deliver the “heavenly bed”, and you probably even have to carry your own bags, but they are clean, safe and you can pretty much depend on what you will get for the money.

 The current economic crisis may eventually lead American businesses to understand that trying to delight every customer at every touchpoint in the customer experience just won’t work.  In order to serve the needs of the shareholders you need to understand the Value Equation for your most profitable customers, and deliver on what does the most to improve that calculation.  Like Costco you must understand that intricate balance of price, product and service experience. 

You can read more about the Forrester Customer Experience Index at

3:46 pm est          Comments

Friday, January 16, 2009

Fighting Off The Competition?
 Apparently in an effort to fight off competition, Winn-Dixie is remodeling stores and aiming to target merchandise more specifically at target audience such as affluent, Hispanic, Kosher and resort visitors.  According to discussion on, it’s not working out all that well. 
Winn-Dixie claims to have spent a “great deal of time” reviewing customer shopping preferences.  Rather than just “preferences” they might have been better served by gaining an understanding of what their target customers really perceived as providing value.  While it’s not likely that Winn-Dixie will underprice Walmart or Aldi, they could seek to retain more of their current customers and grow share of grocery purchases by impacting the Value Equation in other ways.  

I’d be curious to know if that reviewing of customer preferences also included research regarding customer expectations and importance of a broader list of store variables. Certainly price and product mix are part of the equation, but so potentially is every other piece of the customer experience.  From the lighting they see in the parking lot, to the smell in the deli area, the feel of the shopping bags, the conversation of the cashier, the design of the weekly FSI and every other Experiential Component of every Touchpoint, the customer is gathering “data” that will direct their choice of store when they next make the trip to the supermarket.

1:05 pm est          Comments

Monday, January 12, 2009

Can you really know how to better manage your Customer Experience with one question?

Richard Owen of Satmetrix has a new book out picking up on the idea of Net Promoter (A concept his organization originally developed along with Fred Reichheld). 


It’s not that I have anything against calculating a score by subtracting the bottom six boxes (on a 10-point scale) from the top two boxes to generate a net score.  That might even be better than the simple mean in that it washes out the “neutrals”.

 But the idea that you can do much with just that one question (How likely are you to recommend this brand to a friend?) is just as crazy as it ever was.  First of all there is nothing new about this question.  It’s been asked and used as one of the dependent variables in virtually every customer satisfaction questionnaire that most of us have been part of for at least the past fifteen years.  Second, there’s real question of how uniquely well that one question performs as a predictor of financial performance. All the objective, analytical investigations I’ve seen in the past year find that the “one question” is no more predictive of future behavior than the overall satisfaction or intention to purchase in the future questions.  

What is valuable about Mr. Owns book is less likely Net Promoter, but rather the Net Promoter Operating Model which appears to suggest that smart corporations that wish to flourish in the current economic downturn need to do a whole lot more than asking “The Ultimate Question” and just focusing on improving their score.  Instead, as some of us having been preaching in recent years, it requires: 1) creating a customer centered culture, 2) identifying ALL the customer touchpoints and their components, 3) capturing customer feedback to evaluate the experiences, 4) analyzing that data to identify the key areas for change that will best increase customer perceived value of the brand, and 5) taking action to leverage the strengths and neutralize the weaknesses.

10:24 am est          Comments

Wednesday, January 7, 2009

Resolutions for Recession
Forrester Research’s Bruce Temkin just presented his Customer Experience 2009 Resolutions on his website.  I’m thrilled to hear any passionate call to “give customer experience the attention it deserves” (Resolution #10), and to “make steps towards a more customer-centric culture” (Resolution #7), but I am afraid how some will interpret Resolution #1: “We shall not allow a recession (to) take our focus away from customers”. 

In reality budgets are going to be much more heavily scrutinized than in the past, and there will be cuts. I’m hoping that the silver lining in the recession will be smarter spending on the Customer Experience.  The commonly voiced idea that we should be doing everything humanly possible to please every customer at every interaction never really made any sense from the outset.  This is the real world and corporations are in business to make a profit.  As with budgets in general, they have to be balanced (unless of course you’re the President of the United States or a member of Congress), and delivering those profits means having to set priorities and make tough decisions.  Those of us charged with improving customer retention, gaining share of wallet, and improving word of mouth need to work harder at learning what customers really value, and how well they think we are performing compared to the broader competitive set.  We need to take action that’s based upon a better understanding of how customers view the TOTAL Customer Experience we are delivering compared to the price they are paying for our product or service.  That’s what we should resolve to do in this recession (or any other time we are in business).

Read all ten of Bruce Temkin's Resolutions at
8:51 am est          Comments

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Measurement, Management, Optimization
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