A Message to Wall Street

A Message to Wall Street

Analyst reports: the ever-present companion to a corporate exec’s life. I know, because they were my ever-present companion when I worked in corporate life.

Too many things in corporate life are geared around the analyst reports. They seem to make people act like rabbits in headlights. They can’t focus on anything other than what’s in front of them. It’s understandable, because analysts are good at what they do. They look at the facts of today and make predictions for the future of your business.  But in today’s business environment, in my view, analysts are missing a part of the bigger picture that could lead to a poor analysis of where a company’s future lies. The impact to improve their organization’s Customer Experience.

Companies Create Customer Dissatisfaction to Meet Short Term Goals

It is ironic that analyst reporting causes an organization to decline their long term profits through an improved Customer Experience to meet the perceived short term needs of this reporting. In these days of cutting costs to increase margins and a no-fail attitude on posting growth every quarter, analysts are tasked with finding out how the company is going to make the numbers for the next quarter so the earnings report will boost the stock price and it appears they don’t concern themselves with the long term effect on the Customer Experience. These cuts will post growth this quarter, which is the only thing that the analyst’s boss wants to see. Besides, the cuts are necessarily a big deal, just limiting the call-center hours to 9 to 5 Eastern Time or dismantling the warranty program. Yes it boasts immediate profits but causes a poor experience and the Customer is lost for the future.

But somewhere between their analysis of the strengths and weaknesses of the company’s ability to make the bottom line this quarter, the analysts and his or her boss missed the opportunity to prevent one of their biggest threats to long-term growth: a poor Customer Experience.

An Exception in Big Business

One company that does not buy into the need to post huge growth every quarter is Amazon.com. Their long-term vision has resulted in actions that are the opposite of what the rest of the pack is doing. It is because of these actions and their lack of huge profits every quarter that Amazon.com is regarded with a sense of incredulity and even dismissive derision by their competitors.

Amazon knows that their methods are not business as usual today. In Amazon’s Letter to Shareholders last month, Amazon’s Founder and CEO Jeff Bezos details his plans for the future, which are being built today with foundations in customer satisfaction made from the materials of customer experience.  From paying its authors monthly to proactively cutting prices to increase their value to customers, or even investing in technology that enhances the customer’s interaction, Amazon.com puts the customer experience at the top of their short and long-term to-do list. It is no mistake that Amazon.com is one of the longest living online entities of the new millennium. They have planned for this future and built it, one satisfied customer at a time.

The Hungry Hippos vs. Monopoly Approach

When I was a boy, I played a game called Hungry Hippos. In it, you grab the handle of the hippo and try to gobble up the little white marbles before your opponent does. The game ends when each respective hippo has gobbled all the marbles up and the player with the most marbles wins. The game lasts about 60 seconds, at best. There isn’t a lot of strategy and honestly, unless you have a bionic thumb, there isn’t a lot of skill involved with winning it. You are no more likely to win one round over another with much of the game being decided on which way the marble rolls at any given time. Or, in other words, luck. If I was being harsh I would say this is what companies are like today, in part driven by the short term reporting.

I also played Monopoly. This game requires a sound strategy for how to spend one’s money, which properties should be purchased and when and populated by houses and hotels over time. This game requires a lot of thinking and planning for a future result. The longest game of Monopoly I played took my friends and me 5 hours to complete.

Unlike the Hippos, Monopoly took planning and time. Amazon is playing Monopoly not Hungry Hippo’s.  With strategy you could win the game in the long term and make even more money that the Hungry Hippo’s approach.

More companies need to play  Monopoly more than  Hungry Hippos and in my view, Analysts should be encouraging this by the questions they ask about how the organization is going to improve their Customer Experience measures.

If you ignore your long-term goals in order to gobble up the marbles of quarterly earning figures, cutting services that customers rely upon and that enhance their experience, you will create disharmony in your relationship. And as anyone who has been through it can tell you, harming a relationship just takes an instant but building it back can take months, or even years.

So repairing your customer service satisfaction levels can add more time to your strategy and implementation phase. This is time that few businesses have the resources to weather. For this reason, I believe that damaging your customer experience satisfaction levels in the name of profit could be the beginning of the end of your business.

Analysts Need to Consider the Customer Experience in Their Evaluation

Don’t get me wrong. I believe in analysis. I believe that knowing your strengths and weaknesses, your opportunities and threats are good business strategy. I believe that you should listen to the analysis that you have invested time and money to have when you construct both your short and long-term strategy. But you need to protect the customer experience when building them or your strategy is likely to fail you in the long run.

Analysts must include the Customer Experience measures considerations in their reports, along with all their other important data. Because without it, their data is incomplete as will be their predictions. They could, in fact, predict a future for a company that will no longer exist because all their customers were gobbled up by another hungry hippo!

Colin Shaw

Colin Shaw is founder & CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author of four best-selling books. Beyond Philosophy provide consulting, specialised research & training from offices in Atlanta, Georgia and London, England.

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