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.
3:46 pm est
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.
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.
You can read more about the Forrester Customer Experience
Index at http://www.destinationcrm.com/Articles/ReadArticle.aspx?ArticleID=52149
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 www.retailwire.com, it’s not working out all that well.
1:05 pm est
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.
Monday, January 12, 2009
Can you really know how to better manage your Customer Experience with one question?
10:24 am est
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
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.
Wednesday, January 7, 2009
Resolutions for Recession
Forrester Research’s Bruce Temkin just presented his Customer Experience
2009 Resolutions on his customerexperiencematters.com 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”.
8:51 am est
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 http://experiencematters.wordpress.com/