Driving Value by Driving Emotions

by Colin Shaw on July 7, 2015

When it comes to Customer loyalty and retention, most organizations want to appeal to the rational side of their Customers. What I know from over a decade in the Customer Experience game, however, is that rationality has less to do with it than you think. Over 50% of the Customer’s Experience is tied to their emotions. So if you want to earn a Customer’s loyalty and keep them coming back to you, you have to embrace the emotional side.

Maybe you believe me already, which is great. Maybe you are ready to do something about it, but you might have questions, such as:

  • How do you create a deliberate emotional experience for your Customers that keeps them coming back?
  • What emotions should we be trying to evoke?
  • When it comes to forecasting, how do you use emotional data to predict the future?

And probably most importantly,

  • How do you know if it’s working?

Let’s touch on a general answer for each question for now to get you started on your path to a better Customer Experience.

How to Create a Deliberate Customer Experience?

Many organizations think they have no control over how a Customer feels. They instead choose to create an experience that is rationally sound and efficient–although typically only efficient for the company, not the Customer. They look at their experience from the inside facing out. To create a deliberate Customer experience, it is essential is to take the Outside-In Approach, which means to look at the experience as if you were a Customer. You must see it as if for the first time, and note how you feel throughout each moment. This awareness helps you understand how emotions drive a Customer’s behavior. Additionally, you get the opportunity to change how these moments make Customers feel moving forward.

Here is a short video that explains in more detail how this worked for the Norwich Group in the UK.

What Emotions Should the Customer Experience Evoke?

Emotions play an important role in the motivations behind people’s behavior. When it comes to Customer Loyalty and Retention, some of these emotions drive value while others do not. We undertook years of research with the London Business School to determine what emotions are best for driving the behavior we want. After 50,000 participants answered 1.25 million questions about what they want and 1 million questions about how they felt, we learned there are 20 emotions that drive and destroy value in a Customer Experience:

The emotional engagement one feels with an organization is what we call an Emotional Signature.  First, you must determine what Emotional Signature you want for the business and then design an experience that evokes those emotions at the moments you determined in your earlier outside-in approach.

How Do You Use Emotional Data to Predict the Future?

Predictive analytics explains how some organizations hypothesize a future outcome based on existing patterns from data sets in the past. The concept here is that the data exists that can help all of us improve our operations and make better decisions for our Customers.

The predictions are only as good as your data. To use Emotional Data to predict future behavior for your Customers, you must have detailed emotional data to analyze. If you do have detailed data regarding the emotional state of your Customers related to your Experience, you would have a better chance of making sound predictions. If you don’t, you are just taking a lot of time to come up with your best guess.

If you want to learn more about Predictive Analytics, this article in the Harvard Business Review is a great start.

How Do You Know If It’s Working?

When it comes to measurement of your Emotional Signature work for your Customer Experience, a great place to start is with the Net Promoter Score (NPS). The NPS is a tool designed to measure the loyalty of your Customers. Research shows Customers with a High NPS are less price-sensitive, spend more than Customer with lower scores and create higher margins for an organization. They are also responsible for the coveted “word of mouth” referrals of which every organization dreams of increasing.

Measuring an increase in your Customers with a high Net Promoter Score is for the time being the best way to determine if your efforts to evoke the proper emotions during your Customer Experience are working. One of our great success stories was with Maersk Shipping Lines, the largest shipping container company in the world with revenues in the billions (with a b). Using our systems, they improved their NPS from a -10 to a +30 in 30 months—a 40-point improvement.

To learn more about this particular case, please watch the webinar here.

Are You Ready to Get the Answers to Your Questions?

I realize this is tricky, that emotions aren’t very “Business-like.” However, the emotions you evoke in your Experience have a significant influence on your ability to retain a Customer. It is essential to recognize this and also to measure the ability of your Customer Experience to deliver the right emotions to generate the best results.

The answers to your questions are available if you are ready to know them. But be aware, it will require in some cases difficult change and for many organizations a different approach to business as usual.

What do you think? Are you ready to get answers to your questions about the emotions in your Customer Experience?

RICOH Canada had a vision: to be the most trusted brand with irresistible appeal in their market. Join us at our webinar , “Ricoh Case Study: How We Moved Our Loyalty Score by 34 Points in 30 months” to learn from CEO Glenn Laverty how their focus on a customer-centric approach improved their Net Promoter Score by 34-points and grew their business 115%. Reserve your spot today!

 

 

If you enjoyed this post, you might be interested in the following blogs:

 

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author of four bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

Colin ShawDriving Value by Driving Emotions

Using the Subconscious Cues to Drive Customer Behavior Works

by Colin Shaw on June 30, 2015

Earlier this month, the “Women of Algiers” painting by Pablo Picasso sold for $179,365,000. There are many psychological theories regarding the subconscious cues that occur at art auctions.  What happens at art auctions can give us all some insight on what’s going on with our Customers, too—although I’d wager few of us are working in the $180 million range!

When I was listening to this story on the news, the reporter mentioned an auctioneer’s trick is to nod at the bidders in the room when it is their “turn” to bid. Apparently this small cue can encourage the bidder to place another bid even if they weren’t planning on it.

Subconscious cues are everywhere that drive Customer behavior. What else can we as marketers learn about Customers by watching the behavior employed at Art Auctions?

  • The Hammer Price is a trick.  The hammer is the auctioneer’s indication the item has sold at the price he said. However, it’s a trick. The hammer price, what they call the price announced when he smacks that hammer down and says, “Sold to the person with $180 million dollars!”  does not include the commission of the auction house (Sotheby’s charges a buyer’s premium, which is typically 20% on the first $100,000 and then drops to a lower percentage of 12% on anything above that), nor does it include the taxes that are then to be paid (VAT or Value-Added Tax on consumer spending). Essentially, by not including all the sums involved in the “hammer price,” the buyer feels like they are paying less than they are, so they feel comfortable bidding more.
  • Being the top bidder feels good. It’s called the “endowment effect,” which is a term describing how people assign more value to the item because they own it. It is meant to describe how a person feels when the become the top bidder. For that period in the auction, the item is theirs. So they are more likely to pay more for the item so they don’t lose it. Often, they feel they are losing something if they don’t stay the top bidder, so they will bid higher than they anticipated just to keep that from happening.
  • When bidders spot a bargain, in their minds they already own it.  In the art world, the auction price is public. It is always considered a benchmark. Many bidders have the perception that the price is “underbid,” which makes them feel like they are getting a bargain. A great side effect of this perception is the person feels like they already own the bargain. Now the bidder subconsciously discounts the initial public price sum  from the actual price they pay to keep the item (that they feel like they own already because of the “endowment effect”). This subconscious thinking process makes  it seem like they are bidding less than they are.

The auction is about connecting the buyer to the highest possible price.  If ever there were a real life depiction of the law of supply and demand, this particular event is it. The people that want it determine the price of the item. It’s the auction house’s job to make sure that the item fetches the highest price possible. Hence, the subconscious cues they send to bidders.

It’s astonishing to me that a subconscious cue encouraged someone to spend this much money.  However, it certainly supports the idea that the whole area of subconscious cues and encouraging Customers to behave a certain way is powerful! How are you as marketers using this subconscious experience to your advantage?

We always say that over 50% of the Customer Experience is based on a Customer’s emotions. Clearly that’s true for Art Customers, but it’s also true for yours. Many of these emotions are subconscious and are evoked by subconscious cues in your experience. In most exemplary Customer Experiences, the cues are designed to help evoke positive emotions that build your Customer’s loyalty and retention. The important thing here is that they are deliberate—just like the hammer price and the auctioneer’s nod.

What subconscious cues are you building into your marketing campaigns and Customers  experience today?

RICOH Canada had a vision: to be the most trusted brand with irresistible appeal in their market. Join us at our webinar , “Ricoh Case Study: How We Moved Our Loyalty Score by 34 Points in 30 months” to learn from CEO Glenn Laverty how their focus on a customer-centric approach improved their Net Promoter Score by 34-points and grew their business 115%.Reserve your spot today!

 

 

If you enjoyed this post, you might be interested in the following blogs:

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author offour bestselling books and an engaging keynote speaker.

Colin ShawUsing the Subconscious Cues to Drive Customer Behavior Works

What Target Is Doing to Regain Consumer Trust – – And One of The Most Effective Things They (and GM) Could/Should Do

by Michael Lowenstein on June 29, 2015

Michael Lowenstein, Ph.D., CMC, is Thought Leadership Principal for Beyond Philosophy

Target has issued press releases, and been on television, speaking to the fact that they are bringing in new senior IT execs to oversee customer data management. On the company web site, Target has begun posting information about initiatives and programs designed to offer customers greater purchase security. This is a small (it is not prominent on the site, requiring some searching) but much needed first step in rebuilding consumer trust:https://corporate.target.com/about/payment-card-issue.aspx Target would be well-served in building awareness of where to locate this information.

These efforts, however, only scratch the surface on what would help Target make large deposits to the severely depleted consumer trust account. While we’re on the subject, the same holds true for General Motors, which has recalled 6.1 million of its vehicles for operating problems going back almost a decade, at a cost (so far) of close to $1 billion, not to mention the many billions more in lost customer trust and brand reputation impairment, with little in the way of image recovery except notices to customers and an apology from the new CEO.

Here is one of the things they both could do to bring customers closer, and make them part of the image rebuilding effort.

An online community can be an effective lever for reconstructing and stabilizing brand reputation. That opportunity has been available for companies which have experienced negative press and impaired customer perception, such as Toyota, JetBlue, and FedEx. My colleagues and I have been observing how Target’s data breaches, which have impacted over 100 million shoppers during the 2013 holiday shopping season, resulted in a draining of the emotional bank account of customer trust. This has hurt the company financially, but there is also a ‘long tail’ of negative enterprise reputation and image to be addressed.

Online community has the power to help bring back customer and public trust in Target, through collaborative dialogue and assurances that the company is serious about taking responsibility for the data issues, and letting consumers know that strategic plans and processes are in place to fix the problems. Most customers appreciate and want more of this kind of personalization, a relationship, and an emotional connection. Community would provide this for Target, an integral element of its brand trust revitalization.

It’s up to organizations to a) identify the strongest emotional drivers for customers and b) effectively leverage them. Successful organizations have either evolved to do this as part of their operational and shared values DNA , or they have begun to recognize the importance of image and social responsibility in their communication programs, by placing customers’ interests ahead of the enterprise’s. They can build a veritable bank account of trust; and high trust, and the positive reputation and image it breeds, is an enduring strategic advantage, a definite competitive differentiator. And, personalization truly optimizes the overall customer experience, perhaps its most important benefit.

Doing this contributes to making an enterprise like Target feel more human, transparent, authentic and honest, and accessible to customers and other stakeholders. Community also enhances the branded experience, and it makes the customers active partners in shaping Target’s future reputation and image. It’s not the only trust-building answer for Target, but online community would be a major component of this effort.

The Target corporate site has a lot of info about mission and goals, giving and service, diversity and inclusion, the shopping experience, etc. But, unless I’m missing something (and apologies to Target if I am), there is no online community. And, that is an missed opportunity to have secure discussions, generate and track ideas, test or validate products and services, address issues, etc. – building trust and value for Target stakeholders.

Business-to-consumer companies such as Domino’s Pizza, Victoria’s Secret, and Starbucks are active users of information from their customer communities. Starbucks, for example, learned via its community that customers were not staying in the stores when the batteries on their smart phones ran out of power, leaving to go back home or to their offices to recharge. Time in the store equates to spending on coffee and other products, so Starbucks began testing wireless recharging mats at various locations. Domino’s learned from its community that providing a movie makes a great accompaniment to a pizza delivered to customers’ homes; and, in the U.K, Domino’s has partnered with Lionsgate Pictures to offer a code for free streaming movies when a pizza is ordered.

This is the proverbial tip of the iceberg for how insights from private online customer communities can be leveraged, and how communication with customers can be enhanced. Communities offer data that can be used to recruit advocates, address customer concerns and complaints (as in the cases of Target and GM), and provide customers with information on new product and service initiatives. Again, for Target as well as GM, an online community would be a major image-enhancing step forward, helping them regain trust and a positive image.

Not only could these companies establish customer communities, they should.

Michael LowensteinWhat Target Is Doing to Regain Consumer Trust – – And One of The Most Effective Things They (and GM) Could/Should Do

The ONE question to Ask When Making Decisions

by Colin Shaw on June 26, 2015

There are two keys to differentiating yourself from competitors. First, is to know in your bones that putting the Customer first is the right thing to do. The second key is to ask this ONE question every time you make a decision at the company:

How will this affect the Customers?

It’s so simple you would think everyone does this. The fact is, they don’t. Many companies aren’t convinced putting the Customer first is the right thing to do. With many clients we consult, a senior manager asks for a business case showing numbers to justify having more of a Customer focus before they go down that track. It’s safe to assume a company wanting this isn’t asking questions about what the Customers thinks about their latest operational changes.

Ricoh Canada, a wholly-owned subsidiary of Ricoh Americas Corporation, is an organization differentiating themselves from the competition by putting the Customer at the heart of everything they do. Headquartered in Toronto, the company employs about 2,200 people across Canada. It is a regular part of their business decisions to ask the question, “How does this affect the Customers?” However, that wasn’t always the case.

A little over ten years ago, the company recognized that their results were not where they felt they should be.  Mary Ann Sayers, Director of Corporate Sustainability and Community Relations, described a situation where the Customers were not the first consideration and the Canadian operations were being out-performed by a number of other Ricoh operating companies. It was time to figure out how to turn things around.

They started a cross-functional team called, “My Customer.” The participants trained on how to be a leader, to make decisions, and to delegate and manage time better. Once this program began, the team felt more comfortable making decisions for their business with consideration of how it can help the Customer. It was the beginning of their Customer-centric culture.

Over time, this culture reached all parts of the organization. Glenn Laverty, President and CEO, described how every part of the organization, from service and sales to Human Resources and accounts payable, felt connected to the Customers. It didn’t matter whether your job involved the Customer directly; every single member of the organization asked the question, “How will doing this that way affect the Customer?”

Ricoh believed in a continual commitment to pushing the Customer-centric agenda. In every meeting, every time a decision was reached, they asked, “How is this going to impact the Customers?” The senior management team would ask those questions in their meeting and would revel in how simply putting that question out there changed the direction of their actions. They learned by asking that question, their group would develop a different answer, strategy, or program that considered the Customer in a better way. They believed that you couldn’t be mindful enough because if they weren’t mindful of the Customer, they knew it would come back to haunt them later.

The sad thing is there are too many companies that don’t even ask the question. If you are one of the companies that are, however, you kind of hope that is the case—especially if it’s your competitors that aren’t asking!

The good news is that, as is the case with a number of our clients, the journey that Ricoh went got them where they are today. And organizations and the people that work there do have to go on the journey.  It’s not something that you can turn on overnight. It does take a period of time to understand what it means, change the culture, and help your people realize what it means to put the Customer at the center of everything you do.

Ricoh did a great job. They have consistently raised their Net Promoter score and held it there. Despite two recessions and a shrinking emphasis on copier use, they continue to experience year over year growth.

To learn more about the details of their journey from Laverty and myself, please sign up for our Webinar, RICOH – How We Moved Our Loyalty Score by 34 Points in 30 Monthson Thursday, July 23rd, at 11am EDT

 

 

If you enjoyed this post, you might be interested in the following blogs:

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author offour bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

Colin ShawThe ONE question to Ask When Making Decisions

When ‘Push’ Marketing Goes Too Far

by Michael Lowenstein on June 23, 2015

Michael Lowenstein, Ph.D., CMC, is Thought Leadership Principal for Beyond Philosophy

A couple of years ago, our local newspaper, The Philadelphia Inquirer, ran a disturbing story about how a mortgage loan company in Phoenix had sent spam advertising messages which appeared on the screens of thousands of wireless phone customers. Not only were the messages not requested, but these customers had to pay to retrieve them.

In the United States, phone numbers are allocated to wireless companies in blocks of 9,999, all beginning with the same three-digit prefix following the area code. The text messaging address for each mobile phone is derived from the phone number assigned to each customer’s handset and the wireless company’s name. This means that an advertiser can simply choose any three digit prefix in an area code and send a message to 10,000 people by changing the last four digits after the prefix

One industry analyst noted that this is just the tip of the iceberg. Spam techniques abound in online and mobile promotions. This particular type of spam is cheap and easy for advertisers to use. Wireless text messaging is widely used in the U.S.; and, while some carriers are taking precautions to protect their customers from text message advertising, so far neither the direct marketing industry nor the federal government has been able to control this form of spam. As the president of the mortgage company noted, the advertising had brought in new clients and “There still isn’t any rule against emailing.” Online, the core concept of “permission marketing”, and the rationale behind it, is similarly tossed aside each day with the receipt of unsolicited promotional emails.

We call this indiscriminate solicitation of prospective customers one variation of the “Casanova Complex” customer acquisition model, reflective of the 18th century Italian adventurer, perhaps best known for his many female “conquests.” In the haste to bring in customers, companies can often forget to court the right customers, those who represent the best long-term revenue potential, or who won’t overtax the company’s customer service and support structure.

If offline instances of the Casanova Complex are a disease, then it is an epidemic among Internet companies. Many online retail sites have engaged in sweepstakes and other customer generation programs. Their objectives, they say, are to create “viral” promotions which create excitement for their sites and build their databases of available names both inexpensively and quickly. In one instance, a portal site which runs more than 1,000 websites featuring links to other sites signed up 50,000 registrants in a “Win Up to $4,000″ game. Another sweepstakes program secured 126,000 registrants. An online travel products retailer, offering 1 million air miles to the winner, generated more than 60,000 names in 90 days, almost all of whom were new to the site.

The big issue for any of these sites is — do these promotions and schemes draw attractive customers who can then be cultivated over time through the various marketing tools available today? And, once these customers are on board, are companies doing enough of the right things to keep them? Or is this just another extrapolation of the Casanova Complex? As one site marketing executive said: “This is a great, low-cost way for us to acquire new names. The jury’s still out on how many of those new people will come back.” Companies involved in developing or using promotional tools like sweepstakes, unsolicited email, or wireless spam seem inclined, though, at least for the moment, to believe that these possibilities generally don’t apply to them.

For traditional offline companies, the Internet has the potential to ‘commoditize’ their industry or undermine customer relationships. Many brick and mortar CEOs say a key corporate goal is to transition more of their offline customers to online, self-transactional usage. Why? Because an online transaction costs dramatically less than a brick-and-mortar transaction, there is less risk for service error, and the company can more effectively capture and leverage information from an online transaction, to cite a few advantages. Certainly, the transactional advantages of e-commerce are very appealing. But what about the effects on loyalty behavior — especially for new customers?

One of the important ways both online and offline companies can discipline themselves to avoid the Casanova Complex is to apply personalization in all contact with customers, both new and established. This, at least, gives companies a better chance of establishing the basis of a value-based, viral relationship with these customers.

While it’s been estimated that more than 80 percent of e-commerce sites have customer and visitor email personalization capabilities, less than 10 percent of the sites used personalization in follow-on marketing campaigns. For websites favoring incentive devices like sweepstakes and frontal assault “push” email programs to attract potential customers, personalized communication is the perhaps the best opportunity to demonstrate ongoing interest in customers—especially new ones.

Personalization is at the heart of the “relationship” in successful online customer relationship and experience programs. Ultimately, it’s what makes any customer relationship management effort worthy of going viral.

Michael LowensteinWhen ‘Push’ Marketing Goes Too Far

Virgin Shows Links Between Employee Experience and Customer Experience

by Colin Shaw on June 21, 2015

Richard Branson, Founder of Virgin Group, led the charge for better parental leave benefits this week for his employees. The new policy at Virgin allows new parents one year of fully paid leave following the birth or adoption of a child. With Virgin’s announcement on Monday, they are one of only a few companies that offer this kind of benefit for its employees. However, their new parental leave policy represents something deeper than giving new parents time to adjust to their new role. It shows that Virgin values their people and their emotional state while working there.

I have written before of the link between a company’s employee experience and the Customer Experience they deliver on a company’s behalf.  Despite much evidence that points to this link, many organizations continue to keep the two areas separate in their efforts. However, the separate area strategy is not the direct path to success for either.

The Virgin parental leave policy is for parents in the first year following the birth of biological children or after adopting children. The year applies to one family, meaning that if both father and mother work at Virgin, they must take turns on leave over that year with their child. The full benefit, meaning 100% pay is available to employees that have been with Virgin for at least four years.

Many of you reading this might be shaking your heads wondering how on earth they are going to turn a profit with employee benefit packages like this in place? It is a fair question, and it stands to reason that the expenses associated with this new policy are high. However, Branson isn’t concerned about this. According to Branson’s statement about the policy, “If you take care of your employees, they will take care of your business.”

The paternity policy at Virgin reflects two critical elements for the link between Employee Experience and Customer Experience. First, it shows Virgin values employees and wants them to feel like their employer cares about their personal lives and needs. Secondly, it shows that Virgin understands that an employee’s personal emotional state carries over into the emotional state they present to and create for Customers.

Valuing Employees is the Foundation for Employee Ambassadorship

Let’s take a closer look at the first element. The idea that your company values you and cares about your life is an important foundation for employee experience. Furthermore, this kind of relationship is the gateway to employee ambassadorship, a term that describes the most dedicated employees at an organization. Employee Ambassadors are the employees that are the most active and committed to the company’s product and service value promise. They not only go above and beyond to deliver on these service values, but they influence the other employees around them to do the same. Without this foundation of trust between employer and employee, there can be no ambassadors, and these ambassadors are a key factor in creating the Customer Experience you want for your brand.

Emotions Play Big Roles in Both Employee and Customer Experiences

The second element reflected here shows Virgin understands how the emotions of the people involved in both Employee Experience and Customer Experience are essential to having a good Experience. By creating a generous employee benefit for the new parents, Virgin shows they recognize the emotional state of their employees is an important part of what Virgin considers success at their organization. Virgin knows that emotions play a large part in how the day-to-day interactions transpire and evoking the right ones is essential to having a good experience, whether looking at the Employee’s Experience or the Customer’s.

I always say that happy Employees make happy Customers. It is not just a quaint slogan; it’s a fact. When an employee is friendly and smiling, it’s contagious. It spreads, like a happy virus and it infects Customers. However, it takes energy on behalf of the employee to sustain the happy demeanor they display to Customers. Employers that recognize this and build it into their Employee Experience as part of their plans for a better Customer Experience are far more likely to achieve the results they want to move forward in the Experience Economy.

What can you do to create this type of employee environment in your organization? If you don’t know, just look to the leaders like Richard Branson. In other words, when it comes to your employees, maybe it’s time you started thinking like a Virgin.

Don’t miss Michael Lowenstein, thought leadership principal at Beyond Philosophy, as he provides valuable perspectives on B2B and B2C loyalty programs and offers practical and proven methods for developing consistent loyalty programs. Reserve your spot at this informative webinar presented Thursday, June 17th, 2015.

 

 

Special early-bird registration offer: Free Whitepaper Download, “Loyalty Programs vs. Loyalty Behavior: Do Marketers Get What They Intend?”

If you enjoyed this post, you might be interested in the following blogs:

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author offour bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

Colin ShawVirgin Shows Links Between Employee Experience and Customer Experience

When B2B and B2C Key Performance Metrics Flatline….

by Michael Lowenstein on June 20, 2015

Michael Lowenstein, Ph.D., CMC, is Thought Leadership Principal for Beyond Philosophy

This blog represents two true stories of what happens, or can happen, to an organization when its key relied-upon key, single number (CSAT, CES, NPS, etc.) performance metrics flatline and, for all intents and purposes, have little or no granular actionability.

The first, a B2C example, involves a major player in the cable television industry. Two years ago, they adopted, system-wide, one of the popular single number performance metrics. As they have moved from a customer acquisition focus to a more balanced approach between acquisition and retention, they’ve observed that, in endeavoring to leverage their key performance metric, there have been two major hurdles: a) the metric has flatlined across major customer segments, i.e. generated the same or similar results year over year, making interpretation and experience improvement a challenge, and b) the metric isn’t helping them improve the overall value proposition, especially in the area of price/value. This is of special concern in competing with providers who provide substantial content for a much lower price.

The company needs to understand the benefits, and overall perceived value, customers seek in the entertainment experience. This involves looking deeper into the emotional components of value delivery, as well as the functional. In short, the desired outcome is to de-emphasize price and de-commoditize the service, building value delivery advantage around the total experience. More important, it involves utilizing a metric or metrics reflecting real-world decision dynamics such as word of mouth and brand favorability which, along with more actionable forms of analysis, will help them to understand, and prioritze, the drivers of bonded, positive behavior.

The second, a B2B example, involves a major business services firm. In over a decade of performance measurement, only key driver (simple regression/correlation) analysis around a single number metric were reported. As basic customer experience processes were improved, the metric flatlined, offering no opportunity for further enhancement or competitive advantage. A new, more real world research protocol focusing on bonding behavior offered this company a means to understand the relationship between customer attitudes and behaviors, and business outcomes. Web-based survey invitations were sent to the company’s current customers. Close to 1,000 survey responses were received.

The study revealed that an overwhelming 75% of the company’s customers were communicating to others about the organization through offline and online channels. As a result, the new bonding behavior research framework helped classify customers into four behavioral segments, ranging from highly bonded/positive to disaffected/negative. Over 40% of the customers in the study emerged as highly bonded; and under 20% of the company’s customers were disaffected, a reflection of how positively the company was perceived. However, through analysis it was apparent that even mild negativity was driving customers to use competitive suppliers.

The next step in analysis and guidance to the company was to identify which tactics, diagnostics in the survey, could move the organization’s customers to a more bonded state. Applying a multivariate technique to the bonding level segments, it was learned that the company’s ability to anticipate a customer’s future needs truly distinguished the positive from the negative group. This element of performance was more than twice as high in terms of behavioral leverage as the next most important element, the customers’ perception of trust. This was essential to building bonded and positive customer behavior. It was particularly noteworthy that, although the company had measured “anticipates future needs” for some time, until bonding research and analysis was conducted, its critical importance as a positive and distinct decision-making driver had never been identified.

Passive performance has the potential to undermine bonding behavior. Maintaining a reputation as an expert in the industry and anticipating future needs are important values that must be performed well. Analysis identified these as the most critical steps to reduce the percentage of neutral or negative customers.

In order for the company to protect and build bonding levels, our counsel was that the organization must continue to find innovative ways to meet the emerging needs of its customers. This element of service performance was found to have almost four times the impact on driving customer bonding behavior when compared to follow-up regarding staff performance. Again, though the company had measured innovation and need anticipation for several years, its unique importance in driving bonding behavior had never been singled out.

As a core performance metric, customer bonding is very much alive and well in both B2B and B2C products and services. Scores of studies, in many verticals around the globe, have demonstrated that informal word-of-mouth and brand reputation are essential decision-making levers. If anything, due to the more critical nature of touch points, performance, brand perception, and relationships in B2B, bonding may well be more important in this arena than in the business-to-consumer world. Critically, in both B2B and B2C performance measurement, there is little evidence of flatlining.

Michael LowensteinWhen B2B and B2C Key Performance Metrics Flatline….

Science Proves What Really Makes People Happy

by Colin Shaw on June 18, 2015

Many of us would like to know the secret to lasting happiness. Everyone has ideas of course, and not a few of them involve material items. But science might prove that it doesn’t.

Dr. Thomas Gilovich, a professor at Cornell University, believes that material items might provide happiness—but it doesn’t last. The problem is as soon as we have the item, we slowly get used to having it. And…eventually, the thrill is gone.

I know this first hand. I have written before about my love of fishing lures. As a fisherman (whenever I have time, which is woefully never in long supply), the new fishing lure is the representation of the fish I have yet to catch. The anticipation of its arrival is exciting, followed only by the excitement of using it for the first time. Over time, however, the magic lure descends to “general lure” status until eventually, it is just another of way too many lures in my tackle box.  It loses its al-lure (Oh dear. That pun is tough to take, even for me!)

However, Professor Gilovich has some good news. There is lasting happiness to be found from shopping, although it doesn’t involve stuff. No, he suggests that you get more happiness from experiences. What he discovered is that while people’s large material purchases did not continue to satisfy them over time. When people spent money on a vacation or a special art exhibit, however, their satisfaction with that purchase went up over time.  Gilovich said this of the phenomenon:

Our experiences are a bigger part of ourselves than our material goods,” says Gilovich. “You can really like your material stuff. You can even think that part of your identity is connected to those things, but nonetheless they remain separate from you. In contrast, your experiences really are part of you. We are the sum total of our experiences.

So when you are designing your Customer Experience, remembering this concept is key to creating something that will evoke happy and pleased with your Customers. In a recent post, Zhecho Dobrev, discussed how some organizations are using this concept to create new experiences for Customers. From using the surrounding landscape of your hotel to create a one-of-a-kind experience for your guests like the Ritz Carlton in Tuscon, Arizona, to creating a movie experience unique to your venue, in Vienna, Austria, these types of activities are likely to create an experience that pleases Customers. It will also stay with them long enough to tell stories about it to their friends or families. In some cases, they might even return themselves.

An important part of Gilovich’s findings is that the experience becomes a part of us; through the stories we tell and share with the other who shared the experience. They become a bond in our personal relationships, a key to happiness for most people. This same shared experience is not achieved through owning a similar gadget, however. No matter how whiz-bang the gadget is, it is still set apart from us, not part of ourselves the way our experiences are.

To make these great stories and shared experiences, however, one must first have a great experience. How to do that? What better resource than a company that was #1 on Trip Advisor UK, the Royal Yacht Britannia.

Based in Scotland, the Royal Yacht Britannia is designed to give visitors an idea of what it was like aboard Her Majesty the Queen’s floating palace. Chief Executive Bob Downie understood the importance of creating a unique and memorable experience for his Customers. So much so, his efforts and the efforts of his team produced an experience that was #1 on TripAdvisor in the UK.  When it came to producing a great experience, he mentioned three key elements:

  1. A winning mindset. Commit to the mindset of creating an exemplary Customer Experience.
  2. Individual development. Find your team’s strengths and use those to create the experience—and also employee engagement (a key element to a great Customer Experience).
  3. Remembering the little things. Every little moment in the experience should be consistent and Customer-centered. These “little things” are often the difference between and experience that is “meh” and one that is “FANTASTIC!”

Happiness is in many ways an elusive goal, particularly if you try to achieve it with material items. While they are great at first, the happiness they create doesn’t last. Science is proving the better way to have a lasting happiness is through experiences. And who doesn’t want lasting happiness? I can tell you; your Customer’s do.

What are you doing to create happy experiences for your Customers today?

Don’t miss Michael Lowenstein, Thought Leadership Principal at Beyond Philosophy, as he provides valuable perspectives on B2B and B2C loyalty programs and offers practical and proven methods for developing consistent loyalty programs.

Reserve your spot at this informative webinar presented Thursday, June 17th, 2015.

 

 

If you enjoyed this post, you might be interested in the following blogs:

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author offour bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

Colin ShawScience Proves What Really Makes People Happy

When Marketing’s Goal is to Emotionally Connect with Consumers…Content is the Once and Future King!

by Michael Lowenstein on June 17, 2015

Michael Lowenstein, Ph.D., CMC, is Thought Leadership Principal for Beyond Philosophy

Defining the Objective(s) and Mechanics of Your Content Marketing Strategy

Content marketing continues to be on the upswing as a method of building connections and relationships with target audiences. Its goal is to drive visitors to a web site to identify, and obtain, desirable content. Arguably, content is the most effective form of digital marketing, building value and credibility. Like any proactive form of outreach to consumers, including classic advertising approaches, content must have discipline around investment and return. In other words, the resources of time, money, people, and technology have to be accompanied by stated financial objectives and actionable analytics to prove their worth..

Core to any good content strategy is the effectiveness of websites as information sources and relationship-builders. Without innovative and useful content, not only will Google not reward the site with high search placement, but associated efforts – email campaigns, social media marketing, and search engine optimization – will also fall short. Why? Because, even if they are attracted, visitors won’t have a good usage and emotional experience, and they will be less likely to return or convert. And, because return frequency and/or conversion are the twin objectives of any good content development program, that’ll translate to content ineffectiveness, or worse.

Pay Per Click (PPC) advertising, i.e. putting an ad or promotional blurb on another site, can drive traffic to a company’s site. It can often get quick results, in the form of brand visibility and site visits; but the downsides are that it requires knowledge about what partner sites will work best and it can also quickly become cost-prohibitive

Search engine optimization (SEO), the high placement of keywords that, when consumers are searching for content, will bring them to a marketer’s site, remains a core element of content marketing. It can help with page quality, especially with a well thought out title and description (determined by intelligent copy testing). Social media marketing (SMM), in turn, will help enhance search performance for the site.

For marketing planners, it’s a reality that SEO, PPC, SMM, and email must interconnect and mesh; but even the most well-designed communication plan will not yield desired results without innovation and good management So, yes, there’s a lot of Cirque de Soliel-level juggling skill required to make these content programs successful. And, it will only become more complicated as more companies invest more dollars in content marketing, competing for the consumer’s attention.

Where Is Content Marketing Headed?

Seth Godin has been quoted as saying “Content marketing is the only marketing left.” He’s reflecting the new dynamics of consumer decision-making in which push marketing has long since given way to social, educational, story-telling, and gaming/involvement content. All of this is designed to create and sustain emotionally-based relationships.

According to Contently, a content marketing company, 80% to 90% of U.S. businesses are making strategic use of content; and half of those companies invest one-quarter of their marketing budgets on content. So, it is critical to understand where content is trending and how marketers can capitalize on its benefits and avoid its pitfalls.

Contently has identified three principal content strategies:

  • Owned content – publishing through captive media
  • Rented content – sponsored, or paid, content through another comapany’s media
  • Social content – posting and publishing content through PR and social media

Contently believes that, in addition to “digital printing presses” for creating content and distributing it through social media channels and native advertising, more progressive content marketers will use detailed analytics to help plan and refine campaigns. The increased, and more refined, use of social networks is moving content from audience-reaching to audience-building, i.e. building relationships more than connecting with prospects.

Another trend noted by Contently is the focus on building opt-in email subscriber lists, so that the content moved through owned, rented, and social media can be more effectively managed and leveraged to build relationships. This will, increasingly, bring content software into play.

Contently has also identified what content techniques believe will not work going forward. What doesn’t work – indeed, has never worked – is self-serving, thinly-veiled brand promotional material masquerading as content. This isn’t objective news or original insights. It is another form of ‘push’ marketing, and it undermines a brand’s credibility and trust level.

Also, repeating material seen elsewhere, i.e. licensing content, can threaten trust because it is not original Though inexpensive and relatively easy for companies to obtain, re-purposing previously published content will do little to build consumer interest or relationships.

Finally, any form of content deception is sure to backfire on companies. For example, teasing consumers with inflated promises in headlines will reduce credibility and make it more challenging to build a relationship. As Contently notes: “We will see brands get better at writing engaging headlines, yes, but we will also see content that matches the expectations that those headlines set.”

All of these trends are part of the content maturation process.

One important lesson that marketers have learned about content’s power (to attract or repel) is that it is far from linear. In other words, consumers may shift back and forth from marketing to sales – and at their individual, emotionally driven whim. For targeted content to succeed in leveraging inquiry and page visits into sales, irrespective of whether the customer is new or established and irrespective of where they are in the current purchase cycle, developing and interpreting consumer personas has to become a priority. Simply stated, the name of the game has been, and will continue to be, targeting the right content to the right consumers at the right time. No small task.

Michael LowensteinWhen Marketing’s Goal is to Emotionally Connect with Consumers…Content is the Once and Future King!

Think There’s No Such Thing as Bad Press? Think Again!

by Colin Shaw on June 16, 2015

Jeff Bezos said, “A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.” Amazon’s tries hard to provide an excellent experience for their Customers.  By consistently doing what it takes to build an excellent Customer Experience, Amazon enjoys an excellent reputation as a brand and continues to grow in influence and strength.

Other brands do not have the same commitment to consistently delivering a great experience. Inconsistency damages the brand—in as little as five minutes. Warren Buffet said:

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

Frankly, not knowing how your actions affect your reputation can be a disaster in today’s information age.

The Influence of Brand Reputation is Growing

You might think this type of thing doesn’t matter in the long run or that people forget the bad stuff when a new shiny object appears. Maybe you believe that there is no such thing as bad press. To some extent, this is true. However, these days, some headlines hang around longer than you would like, contributing to a reputation for the brand. And they have more influence than you thought, too.

According to their findings in a 2014 Nielsen study, 69% of opinion elite respondents try to learn more about the companies with which they are going to do business. That number was 66% in developed markets and a whopping 76% in emerging markets! And 54% of the Global Opinion Elites say they are increasingly finding out about a company through social media.  To see the chart click here.

In another chart, Nielsen shows 54% of Global Opinion Elites in the US and 50% of them in Canada have decided not to do business because of something they learned about the company conducts itself. The next two countries with the highest scores were Germany with 42% and the UK at 41%. To see all the scores,click here.

Reputations Start The Customer Experience

Brand are a lot of things to us. A brand is only a thought in your mind. Brands can reflect your lifestyle or at least the one to which you aspire. Because of this, we have emotional attachments to brands.

We are always trying to define for our clients when the Customer Experience begins. Most of our clients think it starts when the Customer first contacts their company, but this is not the case. Many times your Customer Experience begins with the positive or negative headline or social media post, or, in other words, that brand reputation you create by your actions.

Typically when companies advertise their brands they idealize it, portraying a wonderful experience.  It helps create the thought in our mind and builds that emotional attachment we have with it. However, when the Customer has the experience that falls short of the idealized version advertised, it disappoints them. Not a great way to start your experience with them…and in some cases a detriment to your social media reputation.

Building your brand reputation increases in importance according to the Nielsen Study. Having a deliberate design to your reputation is essential to your brand. Not knowing this reputation, or how your actions contribute to it is clearly detrimental to your brand. It starts the Experience because it creates an emotional response to your brand in the mind of the Customer—responses that might result in them contacting you first or not contacting you at all.

What kind of reputation does your brand have?

RICOH Canada had a vision: to be the most trusted brand with irresistible appeal in their market. Join us at our webinar at 11am EDT on July 23rd, 2015, “Ricoh Case Study: How We Moved Our Loyalty Score by 34 Points in 30 months” to learn from CEO Glenn Laverty how their focus on a customer-centric approach improved their Net Promoter Score by 34-points and grew their business 115%. Reserve your spot today!

 

 

If you enjoyed this post, you might be interested in the following blogs:

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author offour bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

Colin ShawThink There’s No Such Thing as Bad Press? Think Again!