How to Measure Customer Emotions

by Colin Shaw on April 21, 2016

Some businesses look at the bottom line with customers. Companies that are and will be most successful going forward will optimize something besides margins and profits: The Net Emotional Value.

What is the NEV?

The Net Emotional Value (NEV) refers to the single number that represents the emotional value you provide to your customers. To calculate the NEV, we determine the balance between the positive and negative emotions a Customer feels about their experience with your organization. The “Net” in NEV refers to the net effect of those emotions for customer loyalty and retention.

But what are these emotions? When I wrote my book, The DNA of Customer Experience: How emotions drive value (Palgrave Macmillan, 2007), we worked with the London Business School and the Chair of Consumer Psychology in England to determine what emotions drive value for an organization. We asked thousands of people millions of questions to determine 20 emotions created what we call a Hierarchy of Emotional Value:

Beyond Philosophy’s Hierarchy of Emotional Value

As you can see, some of the emotions drive a short-term spend while others drive a long term spend. Furthermore, you can tell by the emotions and their grouping how they drive value in either direction.

Why is the NEV Relevant Today?

NEV is important to know about your business because it shows how you are doing with your Customer Experience. The philosophy behind it represents the understanding that over half of your Customer Experience is emotional, sometimes at a conscious level and sometimes at a subconscious one. These emotional reactions occur throughout a customer’s journey, on a moment-to-moment basis.

There will be negative moments and positive moments in any Customer Experience. Organizations should work to provide an experience where the positive emotions (any of those in the top three segments of the hierarchy) will outweigh the negative (the bottom). By focusing on tipping the balance toward the positive, you bring those customers back again, because they valued how you made them feel. The result is your business grows and so do your profits.

Some people reading this will be skeptical. They believe that emotions in business might be significant, but not as important as having a great product at a fair price — and a price that has plenty of margin in it.

They are right about part of that thinking. You should have an excellent product at a fair price with plenty of margin for it. Those concepts haven’t changed. What has changed in business today is that this is not enough. Competition has expanded to include a global marketplace and the barriers to entry have begun to fail, making it far easier for your competitors to offer a comparable product quickly.

It’s not hard to see that the old way of doing business isn’t enough to be competitive anymore. To be competitive today, you have to have a great product at a fair price that has an excellent Customer Experience.

The Difference Between the NEV and NPS

Most organizations that have already accepted that the Customer Experience is the competitive differentiator have adopted the Net Promoter Score (NPS) as the metric by which they measure their success. The NPS is an excellent way to measure the customer’s opinion of your Customer Experience as it predicts how likely they are to recommend you to others. I am sure we can all agree that none of us would recommend a product or service that we felt was a horrible experience!

However, the NPS score as a metric has plateaued for many organizations. This plateau is the result of many factors, not the least of which is that the easy things have been done to improve Customer Experience. To move the needle further on NPS, one needs to get down to the real work of improving a Customer Experience. This “real work” includes understanding the hidden reasons customers do what they do, the psychological experiences that drive their behavior in your experience. This is the topic of my new book, The Intuitive Customer (Palgrave Macmillan, 2016).

The NPS is a great metric, but it is limited. The NEV is the new way to define success for your Customer Experience. The NPS only tells you an overview of whether or not the customer approves of your Customer Experience. The NEV, on the other hand, shows the specifics of what’s working and when. It not only shows you where you need improvement, but it also shows you what you are doing right.

The NPS is still important. In fact, our research shows that when the NEV is high, the NPS is too. All this to say that I don’t think any organization should drop the NPS as their metric anytime soon. I only suggest that they take their analysis to the next level with the NEV.

Calculating the NEV is Simple

The new calculation isn’t complicated. In fact, it’s quite simple. It requires you to determine the average positive emotions (from the Hierarchy) and subtract the average negative emotions (also from the Hierarchy).  The result is the NEV. It can be a positive or negative number, too.

Calculating the NEV is Simple

Of course, I realize this is a very simplified version of a real world process that would require research and data analysis. However, these are not complicated either — especially since we already determined which emotions drive value for an organization in our research for the hierarchy.

The fact is emotions matter in Customer Experience. They matter enough that every team should be working to evoke the right ones. However, unless you measure your progress, you won’t know if you are. The NEV can help you see what’s happening in your Customer Experience at an emotional level, and how to make it the competitive differentiator that you need it to be.

Don’t you think it’s time you knew what is going on in your Customer Experience?

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

Training Employees on Nonverbal Clues

‘Top 50 Marketing Thought Leader’ Reveals Latest Trend

Small Talk and Trust

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter & Periscope @ColinShaw_CX

More posts on this topic:

Colin ShawHow to Measure Customer Emotions

How Biased Are Your Customers?

by Colin Shaw on April 19, 2016

We all have biases. These biases are formed of our experiences in life and create prejudices in favor of, or against, different things. One of the many ways these biases manifest is in our responses to psychometric tools like ability tests, personality questionnaires, and even responses on Net Promoter Score (NPS) inquiries. These differences might be little, but when you group them together over a large set of data, you discover that they add up to some big biases.

Net Promoter Score (NPS) is used to determine how likely you are to recommend a product or service to one of your friends or family. Expert NPS analyst Brendan Rocks, Head of Data Science at Satmetrix says demographic details of your respondents can bias the NPS. And you can detect these biases accurately—provided you have enough data.

Most people want to believe they aren’t biased, as bias is generally considered to be a negative thing. However, because we are human, by our very nature, we have prejudices or biases. When you consider how biases shape our behavior, it’s easy to see they can change the way we respond to certain stimuli, like, for example, a Net Promoter Score inquiry.

Rocks says that most of these biases are “small and noisy.” However, because Satmetrix has a large database to sort through, they can identify demographic biases in NPS at a higher level of understanding. For example, Rocks says that all other things being equal, on average, men will rate a brand around four Net Promoter points lower than women (e.g. on a scale from -100 to 100). Also, he says the data shows that older consumers tend to give higher scores than younger ones.

“These little differences are cumulative across demographic dimensions, and can add up when you’re comparing segments in aggregate,” Rocks explains. “For example, say you have one brand marketed towards older women and another towards younger men. Are the differences you see in NPS attributable to performance or demographic bias? Often, it’s just not possible to answer questions like this with data from a single company. But by looking at data across several hundred companies, we can get a pretty good estimate of demographic differences, and get to the bottom of the performance question.”

The demographic bias is not just tied to gender or age, however. It can also be caused by where you live in the world. Rocks explains that similar demographic biases are often associated with B2B companies that look at NPS for different countries. When employee compensation structures are linked to NPS, it can cause a lot of problems for the various international regional managers—particularly if they are in charge of a region where the demographic bias for the nationality skews the scores lower!

Understanding these demographic biases and the reasons behind them is a complicated business, to be sure. Like many of the things associated with people’s behavior, however, it is essential for today’s businesses to use this understanding to help move their Customer Experience to the next level.

“Making data-driven decisions has become central to acquiring customers, and the same is increasingly true for retaining them. Customer experience practitioners are often put in a very tricky position. They are being asked to do things like establish causality with imperfect data and produce accurate predictions, all under considerable uncertainty, and for a business that’s constantly changing. This is where the skills of statisticians and data scientists come into play,” he says.

Rocks admits it is a complicated process to tease out the demographic bias in Net Promoter scores. However, the resulting understanding can help businesses make better decisions to optimize their business and improve NPS.

I am pleased to be doing a keynote speech at the next Satmetrix Conference in New Orleans in May. Find out more and register here for Unite, the Net Promoter Conference.

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

Case Study: Increase Your Sales by 47% By Doing This…

The One Question To Ask When Making Decisions

Have You Done These 3 Things to Improve Your CX?

Make sure you know the true meaning of Customer Experience and help move your company to the next level. Join Beyond Philosophy for the Certified Advanced CEM Training.

LinkedIn followers receive $225 discount – use LinkedIn225 code.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter & Periscope @ColinShaw_CX

Colin ShawHow Biased Are Your Customers?

Hypocrisy revealed of major US company

by Colin Shaw on April 14, 2016

Why do organizations put such little value on loyal customers? Why do we not look at the lifetime value of a customer and see the profit they provide? Why do organizations treat existing customers so poorly?

Surely the economics shows us all the error of our ways. We all know it costs less to keep a customer than it does to acquire a new customer. According to the author of The Fusion Marketing Bible Lon Safko, few companies even know how much they spend on marketing for new customers—or the price per point to acquire one. According to an excerpt from his book on Entrepreneur.com, here are some typical costs for different industries:

  • Travel: Priceline.com: $7
  • Telecom: Mobile Phone: $315
  • Retail: Barnesandnoble.com: $10
  • Financial: TD Waterhouse: $175

(Source: “How Much Did That New Customer Cost You?” entrepreneur.com.)

Suffice it to say, it’s always going to be cheaper to keep a customer than get a customer.

My Cable Company Doesn’t Get it

I’ve just had an interesting conversation with our cable company, Brighthouse. It didn’t go well. But on the positive side, they provided an excellent example of what not to do. Here’s the backstory:

Over the last year, we’ve been having problems with our Internet and Wi-Fi connection. My business is comprised of a virtual team all over the world, so my connectivity and bandwidth is an issue about which I feel quite strongly.

Bright House sent a technician on at least four or five occasions to get this fixed. They often decide the best solution is to supply a new modem. They tell me, “Yes we found the last one didn’t work that well.” However, I frequently have to reboot my modem, no matter which one they send.

On the last occasion they delivered another modem to me (and in my agitated state it might best be described as the “final modem”). Two days later, you guessed it! It wasn’t working.

I had just about had enough so I decided to ask them for compensation for all the time and effort on my part to troubleshoot their service, as well as the productivity lost due to lack of availability of their service.

So what happened?

I explained to the agent my predicament. I gave them a detailed history of my problems. Then, I made my request for a refund/compensation/bid for a demonstration of my value to their organization.

They have given me $23.29 off my bill.

For all of the interruption of work I experienced, all the sitting on the phone with them for hours trying to sort things out over the last 18 months, and staying in the house to accommodate their service call schedule…all of this and the loyalty we demonstrated for the last six years (for which we paid approximately $8,600) came to a nice round figure of $23.29.

To add insult to injury, I then received this flyer.

The hypocrisy of this makes me angry as:

1.They have not respected my time.

2. They don’t have quality products, otherwise I wouldn’t have had the problem I have had.

3. Paying me $ 23.29 compensation shows they are taking me for granted.

What can we learn from this?

Emotions are a huge part of any customer experience; over 50% of them by my estimation. They drive what we remember about a brand and what we expect from them in return for our loyalty. Some emotions cause us to form an emotional bond with our brand (like happy and pleased). They drive value for the customer and the organization.

However, there are negative emotions that break a loyal bond with a company, too. These tend to be disappointed and frustrated. Consider our Hierarchy of Emotional Value that we developed during research for our Emotional Signature® Tool:

It’s clear that I felt disappointed and frustrated by my ISP’s service, two emotions in the Destroying Cluster (at the bottom). So I did what any customer in this emotional state would do: I called their Customer Service. (Poor bloke.)

Each of us has moments that make or break our experience with a brand. Some of these moments are subconscious, meaning they don’t necessarily register with our conscious mind, but they drive our emotions nonetheless.

The subconscious signal of offering a loyal customer $23.29 for their trouble says, “We don’t care.”  The effect is you feel neglected (also at the bottom of the hierarchy). This same effect was realized in a Twitter exchange with their Customer Care. It was transactional. In fact, they quoted policy at me. Moreover, they failed to say even that they were sorry for my trouble. You can add Unsatisfied to the list of Destroying Cluster emotions I felt after my experience.

Most importantly, they failed to address my real emotions of being frustrated and undervalued after being a loyal customer to them.

What Should Have Happened?

As an organization that wants to retain their customers, it’s important to address these moments properly. It starts with empathy for the customer’s problem. Then, it should work to come up with a satisfactory solution that provides a more positive outcome. This type of resolution is the product of proper employee training on soft skills and a deep understanding of the emotional influence on how a customer feels about their experience with you.

These subconscious moments can go either way, positive or negative, but they affect our impression of the brand and also what we remember about the experience. When it’s good, you come back. When it’s not, you don’t.

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

Training Employees on Nonverbal Clues

‘Top 50 Marketing Thought Leader’ Reveals Latest Trend

Small Talk and Trust

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter & Periscope @ColinShaw_CX

Make sure you know the true meaning of Customer Experience and help move your company to the next level. Join Beyond Philosophy for the Certified Advanced CEM Training.

LinkedIn followers receive $225 discount – use LinkedIn225 code.

Colin ShawHypocrisy revealed of major US company

Your Customer’s Mobile Experience – Don’t Ignore It!

by Colin Shaw on April 12, 2016

We have an infographic that demonstrates we are in The Mobile Age. Smartphone users, who love their phones (two billion, with a “b”), use them for two hours a day. This fact could mean that the ONLY Customer Experience (CX) people have with you might be a mobile experience.

Organizations today cannot afford to ignore their Mobile User Experience (UX) another usage minute.

Check out these numbers for smartphone users in the  U.S.:

Across the pond, the numbers are also staggering. According to OfCom, the UK’s communications regulator, the UK is a mobile society. Two-thirds of the adult population in the UK had a smartphone, an increase of 27 percentage points since 2012. That means that 66% of the adults in the UK are most likely to access your organization through your mobile experience. To read the whole report, click here.

None of this is a big surprise to you is it? EVERYONE knows we love our phones. Chances are, you are reading this on your mobile right now.

Despite the ubiquity of the smartphone, many organizations haven’t examined how their user experience is performing for the UX (and ultimately the CX!). From apps to social media sites to the mobile version of their site, organizations often expect them to do all the same things a desktop version does; same functionality, fewer pixels, as it were.

But mobile doesn’t work just like a desktop, does it? For example, my fat fingers lack the accuracy on the screen they enjoy on my full-sized keys at home. I get around this by dictating a lot of my data entry when I am mobile. We all know how accurate that can be, don’t we? (Adding my British accent in only adds to the fun of the output!)

So if your mobile site has the same forms with the same amount of data entry required as your desktop versions, you are essentially designing a frustrating experience for your mobile UX deliberately.

Frustrated is not an emotion that leads to the right things in a UX or, for that matte

Important Goals for Your Mobile UX

There are three key words to remember as it pertains to your mobile UX:

Efficient, Accessible, Secure

Why are these three so important? You can answer this question for yourself. Consider a time when:

…You were trying to perform a function on the mobile and it took ten times longer than it would have on your desktop. Were you pleased or perturbed?

…You waited FOREVER for the graphics to load. Or didn’t wait and bailed. Were you patient or preemptive?

….You suddenly realized that you were using a lot of private information on a public transmission? Were you pleasant or P.O.’d?

When considering how you felt in each of these situations (particularly if you were perturbed, preemptive,  or P.O.’d), how do you remember your experience with that mobile site? Are you going back? My guess is probably not.

TechTarget had a great article with tips that help you design a mobile UX that doesn’t make your customers throw all their toys out of the crib. They range from things like, “speed over spectacle” to “avoiding technical jargon,” to common sense advice like, “if something looks odd, users won’t trust it.”

But perhaps the most important thing to take away from the article is that good mobile UX requires building trust with your customers. This trust is built with good communication, and, of course, efficiency, accessibility, and security. Just like in real-life moments with customers in a store or on a call, and even desktop interactions, like a website interface or chat, your mobile UX needs to make your customers feel a certain way. These feelings need to lead to trust.

You can see why the mobile experience should be a big priority for any brand that wants to make a great impression with their Customers. It’s the rising channel, the pathway to your brand experience, and the place where you are likely to make a first impression for your brand. After all, your mobile experience might be your customer’s ONLY experience.

The question becomes what experience are they having with yours?

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

Mobile Experience: Harnessing The Power of Your Mobile Channel to Increase Traffic in Retail Stores

The Rise of Mobile Customers and How to Reach Them

The Mobile Age

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter & Periscope @ColinShaw_CX

If you share my belief that creating value for customers is a high priority for every business and organization, then I would recommend you to join as a Free Subscriber with Customer Value Creation International (CVCI).  You will be exposed to hundreds of curated articles, webinars, blogs and other knowledge assets.  Join the Customer Value Creation global movement.

Colin ShawYour Customer’s Mobile Experience – Don’t Ignore It!

CX Is Hitting A Brick Wall

by Colin Shaw on April 8, 2016

I appreciate this is a controversial title – but let me explain! Last year, I questioned whether Customer Experience had delivered the goods. This year, I question whether Customer Experience is the problem. This year, I think Customer Experience isn’t failing us; we are failing Customer Experience.

This whole line of thinking started last June with the American Customer Satisfaction Index (ACSI) score. ACSI uses an overall U.S. Customer Satisfaction score to denote the health of the economy. Since 1994, the ACSI score rose from 74.8 to 76.8 in 2013 —and then dropped to 75.2 by the end of 2014. The scores then show a steady decline across all four quarters last year, ending at 73.4. You can see the whole chart here.

This trend is, of course, a tad disappointing.

The idea of Customer Experience is that by improving it, you will increase your emotional engagement with your customers. They will feel positive toward your brand, like you more, form an emotional bond with you, become more loyal to you, and give you more of their business. It isn’t a stretch to assume they will besatisfied by the experience.

Many organizations say they have embraced Customer Experience. They say they have invested time and money into improving their Customer Experience.

But the ASCI continues to drop. Which begs the question, is investing in the Customer Experience worth it?

The answer is YES! We know that improving the CX does pay dividends. Our work with clients shows this to be the case.

Here are two examples:

Maersk Line who have improved their net promoter score by 40 points in 30 months which resulted in a 10% increase in shipping volumes.

Ricoh Canada who improved their Net promoter score by 34 points in 30 months and have subsequently grown revenues by 10% year on year,  in a ‘shrinking printer usage market”.


So if this change is possible, why hasn’t the ASCI risen the way we expected with so many people embracing the concept of Customer Experience?

I have a theory, but bear with me; again it’s a bit controversial! Part of the reason Customer Experience hasn’t made the gains for companies that it should is because people are just jumping on the bandwagon, rebranding their jobs Customer Experience, but not doing anything differently.

For example, only the other day I was talking to somebody who had Customer Experience in their job title. During the conversation, this person revealed the fact that he used to be in Customer Service. The rest of the conversation went like this:

Me: So, what are you doing differently now that you are in Customer Experience instead of Customer Service?

CX Professional:   Nothing.

Me: (Sigh)

Sadly, this situation isn’t uncommon for me. Too many people think that Customer Service is the same thing as Customer Experience. But it is MUCH more than that. It involves a careful examination of what emotions the experience evokes throughout the different moments, including how customers come into the experience. Customer Experience also creates cues for the subconscious, which can be positive or negative. Customer Experience is all the moments a customer has in an experience with you, not just the ones with the Customer Service team.

In the case of the fellow I was speaking with the other day, their management perception is ‘they are doing Customer Experience now’. However, the reality is nothing has changed. To be honest, they don’t know what they are doing.

The danger that my industry faces is that with Customer Experience being the vogue topic these days, everybody talks about it—even when they have no idea what it is or how to use it. As a result, nothing changes. The same outcomes exist because the same problems cause them. Only now, instead of seeing the problems in the experience itself and blaming them, the whole concept of Customer Experience takes the blame for overpromising and under-delivering..

Customer Experience isn’t the same thing as Customer Service. It is more than a title change or a catch phrase. It is more than a fad; it’s the competitive differentiator you need at a time when competition is fierce and not likely to ease up anytime soon.

When I started consulting back in 2002, no one knew what Customer Experience was. Now, in 2016, some still don’t. As I said, everybody has jumped on the Customer Experience bandwagon. You hear the term everywhere. You also hear a lot of ideas about what it is. We define it as:

A customer’s perception of their rational, physical, emotional, subconscious, and psychological interaction with any part of an organization. This perception affects Customer behaviors and builds memories, which drive Customer loyalty and affects the economic value an organization generates.

I would argue that most of the people on the bandwagon today don’t really appreciate what a Customer experience entails. I would argue that they certainly don’t go into the depths of what this definition includes. In other words they don’t know what they don’t know. As a consequence they don’t make the progress that Maersk Line and Ricoh Canada has.

Listen, your competition would love nothing more than for you to carry on thinking that Customer Service and Customer Experience are the same things. But if you want to help your organization perform better and actually be better, you have to learn what Customer Experience is and do the hard work associated with improving it.

You have a choice to make:

#1: Do nothing…and get the same results you always have.

#2: Jump on the bandwagon and say you know what Customer Experience is when you don’t…and still get the same results you always have.

#3: Be a part of the movement that is designed to help you carve out a competitive difference at a time when a competitive difference is hard to come by. You can do the work needed to create a Customer Experience that makes your customers feel good about your brand, bond with you emotionally, and come back for more.

What will you choose?

Make sure you know the true meaning of Customer Experience and help move your company to the next level. Join Beyond Philosophy for the Certified Advanced CEM Training.

LinkedIn followers receive $225 discount – use LinkedIn225 code.

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

Key Learning from 15 Years of Net Promoter Stats

‘Top 50 Marketing Thought Leader’ Reveals Latest Trend

Has Customer Experience Delivered the Goods?

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter & Periscope @ColinShaw_CX

Colin ShawCX Is Hitting A Brick Wall

How to Strategically Compete Against Your Peers… And Yourself

by Michael Lowenstein on April 7, 2016

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

Marketers are always looking to optimize their perceived customer value proposition, and to improve the elements of transactional and relationship experiences needed to deliver that value. What competitors are doing always comes into the dialogue, and companies must be aware of how the value offered and the communication tools used by competitors in the marketplace impacts their own performance. This gives them the flexibility to mitigate threats, spot new ideas, improve products or processes, and/or offer more desirable value.

The methods used to understand competitors most often involve one or more approaches to benchmarking. Benchmarking goes beyond competitive analysis to interpret how peer organizations do what they do in terms of quality, time, cost and overall customer value dimensions. As identified by noted benchmarking theorist and management scientist H. James Harrington, “Benchmarking is creating better solutions upon a firm knowledge base. It is not copying the best.” Done well, insights from competitive performance benchmarking can:

– Identify business opportunities 

– Challenge internal operating paradigms

– Help set realistic but assertive performance goals

– Uncover strengths and weaknesses within the organization

– Provide learning from leaders’ experiences

– Support intrapreneurship and creativity

– Guide methods for performance improvement 

– Prioritize and allocate resources (time, money, people, facilities, technology)

One of the more actionable and accurate definitions of benchmarking I’ve seen goes like this: ‘Benchmarking is a strategic and analytical process of continuously measuring an organization’s products, services and operating methods against best practices of recognized leaders (inside or outside of the company’s business areas) for the purposes of improving performance results.’ This pretty much sums up the way benchmarking should help companies perform relative to peers within their business arena. Simply put, competitive benchmarking can move a company out of its comfort zone and into measurable improvement and action.

Some companies, however, go too far with benchmarking initiatives; and they can become hyper-concerned, even obsessed, with competitive focus inside of their industry. Adequate consideration may not be given to the soundness, for example, of a direct competitor’s goals and methods. As experts like Harrington identify, benchmark-centric companies often end up with undesirable results, such as targeting processes that aren’t critical to the business, not understanding what customers really want, leaping into fixes without upfront defined plans or goals, expecting instantaneous results, etc. We’ve seen this in the past with directly competitive product and service feature-for-feature advertising and marketing; and we are still identifying it in such sectors as automotive, retailing, cable television, banking, and wireless lelecom..

Benchmarking should be seen as a means to a desired end, and it will have little worth if not accompanied by disciplined plans to change. Rather than get ‘red-herringed’ and overly attentive to what direct competitors are doing (Harrington has warned companies that overstressing comparisons to their peers can backfire if, for example, all of these companies are seen by their customers as providing mediocre value), organizations can conduct targeted research and analysis which will help identify, in depth, the positioning and elements of delivery that other companies in their arena are offering, and also how it affects their current, potential, and former customers.

For example, many companies are now more actively using gamification as both a competitive weapon and as a customer data-gathering device. So, in benchmarking gamification efforts of a peer, an organization may take up similar approaches. Having done so, they may be hard-pressed to understand why an initiative such as this doesn’t generate more positive results.

Briefly, here’s why. Consumers seem to be increasingly aware of the benefits, in both purchases and information, that they are providing to vendors. They are putting more and more pressure on these companies, in both loyalty programs and the act of shopping and the purchase transaction itself, to provide more personal value. In studies of loyalty program participation, high percentages of customers have said they would spend more with vendors that offer points for activities other than making purchases. They are looking for better experiences across channels, as well as reasons to spend. Gamification, though it doesn’t always involve actual games, does reach out with methods to socially involve consumers. If organizations work to understand the degree of this desirability (relative to the features their competitors are offering), they can certainly leverage it to their advantage. The same holds true for other rational and emotional elements of product and service value delivery.

If organizations understand the real pros and cons of competitive analysis and benchmarking, they can effectively use the suite of valuable performance assessment tools as key elements in their continuous improvement initiatives.

Republished with permission from CustomerThink.com

Michael Lowenstein provides strategic consulting, research design and in-depth, leading-edge analysis that helps clients deliver outstanding business results through deeper customer experience, communication, relationship, employee and brand equity insights. Beyond Philosophy provide consulting, specialised research & training from our Global Headquarters in Tampa, Florida, USA.
Michael LowensteinHow to Strategically Compete Against Your Peers… And Yourself

Why powerful leaders fail…

by Colin Shaw on April 5, 2016

According to recent social science research, powerful people and leaders can fail as they will not collaborate.

NPR had a recent broadcast on this concept. Researcher Angus Hildreth and Professor Cameron Anderson from UC Berkeley’s Haas School of Business, concluded that often when these powerful people get together they have to decide who is in charge. As I listened to this I recalled my life in the corporate world and it rang true of many interactions I saw with senior people.

As part of this research, during a demonstration at a company, they divided the team into groups of four. The first group had the four most powerful people in it; the second group had the next four most powerful people, and so on. Each group was given different candidates for a high-level position and had to reach a consensus on whom to hire. Hildreth said the groups with the less powerful people reached a consensus much easier than the most powerful people did.

Hildreth also said that in the group exercise with the candidates the high-powered group:

  •      Tended to focus less on what was going on in the task
  •      Talked about other things
  •      Vied for position
  •      Argued over who should lead different parts of the task
  •      Didn’t disclose all the information they had about his or her candidate to the others.

The researchers said that high-powered people also have problems with creativity. While typically giving an individual power makes him or her more creative, in a group, that power creates obstacles and less creative ideas.

This rang true for me. When I was a Senior Vice President in my last corporate role, when people asked what I did all day. I used to reply ‘I play chess’. Why chess. Its was all about politics. In truth people couldn’t care less about the Customer. All they cared about was their political position and how much power they had.

Powering around the Powerful

As part of our consulting philosophy, we encourage a cross-functional team to champion the Customer Experience. We do this to encourage, you guessed it, the collaboration between departments to facilitate buy-in from their teams. Many times, the lead of the division is who is included in these cross-functional teams.

So, as you can see by the results of this study, it takes more than a team effort to get things done. You might say, it takes a little manipulation and ego massaging to get what you need in these situations.

To that end, here are four workarounds you can use to power around the powerful:

1.   Have a solution already started so they have less to work out together.

NPR Social Science correspondent Shankar Vendantam explained that when Congress wants to reach a deal, they have the lower-ranked people meet first and set up the framework before the influential leaders get together.

2.   Play to their need for attention.

Find ways to steer the project into each of your dominant participant’s wheelhouse, allowing them to take the floor as it were in their area of expertise. Often, that can enable them to put the ego aside and work with others.

3.   Give them the short version.

For creative projects, put together a brainstorm before the session and choose the best ideas to present to the authoritative group. For example, if you are looking for a solution for an operations function, bring in three to five of your lower-ranked team’s suggestions for a solution and have the team start there instead of at the beginning.

4.   Pad the timeline.

Despite all your best efforts here, you might still suffer the delays and lack of consensus you seek. Allow for this in your schedule to reduce stress and pressure for everyone involved. (When you don’t have the pad available, start begging for extensions!)

5.  Make them look a hero!

If you are not worried about the prestige and the politics, make the people that you need to influence the hero. Normally, the people ‘in the know’ will understand that it is you who are pulling the strings anyway so this doesn’t hurt in the least.

Needless to say, when you need collaboration done, done well, and done on time, putting your most powerful people on the task isn’t your best strategy. However, it is an undeniable fact that you will likely find yourself facing this situation at some point at work and to make progress you will need to have a strategy to work around it..

How do you deal with people with people who do not want to collaborate?

To help improve your Customer Experience sign up for our Certified Foundation CEM Training starting on April 8th.

LinkedIn followers get a special $225 discount by using  LinkedIn225 code.

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

Is Leadership Really on Board with Your CX Agenda?

3 Dangers of Employing Smart People

‘Top 50 Marketing Thought Leader’ Reveals Latest Trend

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter & Periscope @ColinShaw_CX

Colin ShawWhy powerful leaders fail…

Eliminating Experience Pain Points, and Creating Customer Satisfaction: Is This Ever Enough?

by Michael Lowenstein on April 4, 2016

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

After recently reviewing the Forbes customer value/customer loyalty interview of TD Bank’s CMO, Vinoo Vijay, one of his areas of emphasis (in addition to frequent customer surveys and generating insights from employees) was the resolution of problems. This is extremely important, because it speaks to how more progressive companies endeavor to make experiences less painful, if not more fulfilling and memorable.

At the outset, I’d like to applaud the active inclusion of employee input and insights into TD Bank’s customer experience program design. Here’s  my comment from an interview given about ten years ago: “You cannot create, or sustain, customer loyalty without committed employees. The key is to focus on developing and supporting employees so that they, in turn, focus on the customer. Ideally, you want every employee to be an ambassador. Employee ambassadorship is a framework for linking employee commitment to business results by emphasizing the need for the entire organization to create unique, value-add customer experiences. Optimizing customer experience is everybody’s job.”

Now, as to problem resolution, from the Forbes interview, my read (and as indicated by Vijay) is that principally this meant the elimination of all customer transactional and relationship pain points. And, this perspective got me to thinking: Irrespective of B2B or B2C industry, is the fundamental meeting of basic customer expectations, such as a pain-free transactions or experiences, ever sufficient to drive loyalty behavior? And, on a related note, is complete satisfaction ever enough to build and sustain loyalty behavior?

Customer Satisfaction Doesn’t Drive Loyalty Behavior

Let’s begin with creating satisfaction in the form of meeting basic customer product and service needs.

The surveying, such as referenced by TD Bank, to identify what drives satisfaction-reducing pain will provide superficial guidance on emotional drivers of desired customer behavior. As quoted by Vijay in a CMO.com interview:

“Particularly in financial services, brands must be grounded in tangible differences. For example, at TD Bank we are always looking to build on our unique differences that set us apart from other banks, from the big -– like being open longer than any other bank –- to the small -– like having pens that are not chained to a counter. These are hard investment decisions that come from a deep understanding of customer pain points and a commitment to be better.”.

Though these tangible issues have some emotional connection, they are still fairly fundamental value components. And that’s the first issue. Customer satisfaction is benign and passive; and, it is rarely sufficient to generate, or sustain, loyalty behavior. It’s understandable why TD Bank’s marketing takes this approach to value. In the case of consumer banking, customer experience research has shown that the expectation bar is low enough that even providing slightly enhanced tangible element experiences has been sufficient for TD Bank’s “Banking Human” campaign to have been strategically successful.

However, in most B2B or B2C industries, is simply reducing or eliminating pain points, i.e. meeting experience requirements so that the customer is satisfied, enough? Satisfaction has always been about what we understand to be total quality expectations in products and services, as perceived by the customer.

Unfortunately, satisfaction, which mostly measures attitudinal response to the functional and tangible elements of value delivery (time or timeline, accuracy, completeness, suitability, price, ease/convenience, functionality, etc.), such as Vijay has identified in his interview, has been proven to have little impact on, or connection to, actual downstream customer decision-making. Even total quality icon W. Edwards Deming believed that satisfaction was an ineffective metric for truly understanding the effect of expectations on customer actions.

Unexpressed Complaints: An Untapped Opportunity

What about the customer problems and/or complaints, aka pain points, that are never expressed to the vendor? As reported over the years, it has been estimated that only about 2 to 10 percent of B2C customers actually air their experience grievances to the supplier. Satisfaction-oriented companies never ask customers about complaints they haven’t expressed, and that’s the second issue. Some industries have notably high levels of customer complaint silence: financial services, food and beverages, pharmaceuticals, and high-tech.

Why don’t customers complain?

  • They’re busy, and they can’t or don’t want to take the time

  • They consider the complaint interaction a hassle and an annoyance

  • They see no direct value or benefit to them in making the complaint

  • They don’t think the supplier will do anything about the complaint

  • They can get what they want from an alternate supplier, so they switch

Further, another research company has found that over 40% of the customers in their business-to-business database who had a problem or complaint never informed the supplier about it. Their reasons for not expressing their complaints were remarkably similar to those given by consumers. We’ve seen other studies suggesting that, depending on the industry, unexpressed B2B complaints may range as high as 80% to 90%, so this is hardly an exclusive B2C issue. Even though the rate of expressed complaints is higher in the business-to-business world, the lost revenue potential of unexpressed (and, so, unresolved) complaints is significantly greater there because of the lifetime value of each customer.

Recalling statements made in the TD Bank interview put me in mind of a pivotal piece of very revealing earlier financial customer complaint research. In the 1990’s, Banc One conducted a study of the loyalty leveraging effect of expressed and unexpressed complaints on its retail business customers. The bank found that about half of these customers had service complaints. Of those with a complaint, only about half had actually expressed them to bank employees. In other words, fully one-quarter of the complaint picture was missing. Further, those who had not expressed their complaints were far less likely to continue their relationship with the bank than those who had registered a complaint and had it positively resolved. And, of course, those with neutral to negative problem resolution were clearly at risk.

Here is the summary of what their study found within the customer base:

  • No Complaint(s) (50%): Retention Intent, 82%; Recommendation Likelihood, 89%

  • Registered Complaint(s), Positive Handling (12.5%): Retention Intent, 87%; Recommendation Likelihood, 91%

  • Registered Complaint(s), Neutral/Negative Handling (12.5%): Retention Intent, 37%; Recommendation Likelihood, 35%

  • Unregistered Complaint(s) (25%): Retention Intent, 55%; Recommendation Likelihood, 61%

The potential for complaints to negatively impact customers’ future purchase intent and recommendation should never be overlooked. In loyalty research for a B2B client, a major manufacturer of paper and related products, it was determined that close to 40% of their high volume accounts had serious performance complaints. These complaining customers were fifteen percent less likely to be positive about continuing to purchase from the client than those without a complaint. Other studies show similar negative loyalty effects of complaints.

Customers experiencing inefficient or insufficient resolution to complaints are not only less likely to repurchase or recommend from that supplier, they will spread their negativism – telling anywhere from two to twenty people about their experience in direct word-of-mouth, and significantly more via mobile devices and the Internet. And, as we’ve learned, the ‘long tail’ represented by negative online postings means that consumers will see opinions of ‘badvocates’ over a considerable period of time. With numbers and results like these, it’s little wonder that, left poorly handled or totally unresolved, complaining customers can sabotage even the most carefully crafted marketing, social, or customer loyalty program.

Vijay concluded his CMO.com interview by stating:

“We are focused on making it ridiculously easy for consumers to find, assess, buy and use our banking products… The incredible opportunities to engage with consumers that digital, mobile, social and data create are game changing. But, as a marketer, the most important thing we can do is ensure our brands continue to build on and follow through on their promises. Only then will every touch point with the consumer… turn into a real positive.”

Wise words, to which most marketers would easily agree. That said, I’d respectfully advise TD Bank and any B2B or B2C company interested in optimizing customer behavior that
a) more needs to be done than just understanding what satisfies customers, especially where emotion and memory are concerned, and
b) generating (and resolving) unexpressed complaints, i.e. unsurfaced pain points, have such significant power that they should have equal priority with all other areas of stakeholder insight.

If asked for prescriptives, and fully recognizing that most companies don’t actively look to fix what they perceive as working well, here are two things I’d suggest:

  1. Beyond  transactional pain point reduction or elimination, identify (on an emotional as well as functional level) what makes for positive, differentiated, memorable and sustainable experiences that drive long-term loyalty behavior.

  2. Following the Ishikawa Five Why concept of delving into customer behavior, identify complaints that haven’t been registered, determine their severity (as well as what has kept the complaint(s) from being surfaced), and address them

Republished with permission from CustomerThink.com

Michael Lowenstein provides strategic consulting, research design and in-depth, leading-edge analysis that helps clients deliver outstanding business results through deeper customer experience, communication, relationship, employee and brand equity insights. Beyond Philosophy provide consulting, specialised research & training from our Global Headquarters in Tampa, Florida, USA.
Michael LowensteinEliminating Experience Pain Points, and Creating Customer Satisfaction: Is This Ever Enough?

Eyes On The Customer Experience Prize: Will 2016 (Finally) Be The Year Of The Emotionally-Driven Employee Ambassador?

by Michael Lowenstein on April 1, 2016

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

We think so.  And, building on recently completed, groundbreaking employee ambassadorship research which supports our perspective, we’re convinced of it.

Employees are the common denominator in optimizing the customer experience. Making the experience for customers positive and attractive at each point where the company interacts with them requires an in-depth understanding of both customer needs and how what the company currently does achieves that goal, particularly through the employees. That means that companies must understand, and leverage, the impact employees have on customer behavior.

Supporters of employee satisfaction and engagement research techniques, with their focus on retention, productivity, and fit or alignment with business objectives, have made some broad, bold, and often unchallenged, assertions with respect to how these states impact customer behavior.  Chief among these is that, beyond skills, everyday performance, and even commitment to act in the best interest of their employers, employees have natural tendencies and abilities to deliver customer value.  Though on the surface this sounds plausible, and even rather convincing; a thorough examination of how employee satisfaction and engagement link to customer behavior will yield only a tenuous, assumptive and anecdotal connection. In other words, there is much vocal punditry, and even whole books, on this subject, but little substantive proof.

Powerful new research has produced results which allow companies to identify current levels of employee commitment and provides actionable direction on how to help them become more committed and active brand ambassadors. Employee ambassadorship focuses on how to improve customer experiences, and their loyalty and advocacy behavior, and in turn increase sales and profits,

It is often stated that the greatest asset of a company is its employees, and this research has uncovered how an organization can link, drive and leverage employee attitudes and behavior to expand customer-brand bonding and bottom-line performance—and this is revolutionary!  Employee ambassadorship research can be combined with existing customer and employee loyalty solutions to provide companies comprehensive and actionable insights on the state of their employees’ attitudes and action propensities, and how those may be affecting customer behavior..

Employee ambassadorship identifies new categories and drivers of employee emotional and rational commitment, while it also links with the emotional and rational aspects of customer commitment.  At the poles, these employee-focused commitment categories include:

– Ambassadors, the employees who are most committed to a brand. Ambassadors represent employees who are strongly committed to the company’s brand promise, the organization itself, and its customers. They also behave and communicate in a consistently positive manner toward the company, both inside and outside.

– Saboteurs, the employees who are the least committed to a brand. Saboteurs are active and frequently vocal detractors about the organization itself, its culture and policies, and its products and services. These individuals are negative advocates, communicating their low opinions and unfavorable perspectives both to peers inside the company and to customers, and others, outside the company.

In any group of employees, irrespective whether it’s a service department or a branch office, there will be differing levels of commitment to a brand and company, its value proposition, and its customers. If the employees are negative to the point of being saboteurs, they will actively work against your business goals.  However, if employees are ambassadors, and whether they interact with customers directly, indirectly, or even not at all, they will better service and support your customers.

Our research process brings in several components which build on, but differ markedly, from traditional, or standard, employee satisfaction and engagement techniques:

  • For one difference, the attributes we examine actively include a significant proportion that are customer focus-related.

  • Next, we incorporate multiple overall ‘value indicators’, which examine personal commitment to the organization, degree of positive and negative word of mouth on behalf of the company’s products and services, and strength of belief in the value of these products and services to customers.

  • We also develop an emotional profile, i.e. how employees feel about the work they do for the company, and identify what employees desire most in their jobs

  • Finally, we evaluate each of the attributes based on
    a) how employees rate them, i.e. agree/disagree,
    b) how much the employees want them, and c) their prioritized value to the organization.

In the coming months, we will provide material demonstrating what our employee research has identified, and why even usually risk-averse HR directors actively support, and recognize the value of, new insights we’ve uncovered. For now, here are some highlights, from a recent ambassadorship study conducted on behalf of the customer service operation of a major insurer:

  • In prior engagement studies, our client had identified poorly performed employee attributes.  They put some initiatives in place based on this research, with little real result.  Our research, however, uncovered previously unidentified subconscious employee priorities:  Customer focus and ‘bonding’ elements had particular promise for the organization.  Dedication to provide value to customers, using employee feedback for improvement within the department, leveraging teamwork, recognizing that employees have an effect on customer behavior, and enabling employees with more personal decision-making in their jobs.  These, we determined, would provide the most enterprise value.  

  • Conversely, lack of freedom to express ideas, poor implementation of ideas, insufficient cross-training, feeling little value as a team member, lack of feedback, feeling that leadership has less commitment to service value than the rank-and-file, and low belief that other groups within the company have equal customer focus were undermining, even destroying, employee value to the enterprise.

  • Our client had the belief that very few of the over 500 customer service operation employees included in the study had tenure of more than ten years; however, employees with this length of service represented close to one-quarter of all who participated.  More important, tenure had a significant impact on degree of employee commitment.  Commitment declined after one year of service, went further downhill at five years, was even lower at ten years, and remained low among those with over ten years of service.

This, as noted, is the tip of the employee emotion, attitude, and behavior research insights iceberg. There’s a lot more to tell.

Republished with permission from CustomerThink.com

Michael Lowenstein provides strategic consulting, research design and in-depth, leading-edge analysis that helps clients deliver outstanding business results through deeper customer experience, communication, relationship, employee and brand equity insights. Beyond Philosophy provide consulting, specialised research & training from our Global Headquarters in Tampa, Florida, USA.
Michael LowensteinEyes On The Customer Experience Prize: Will 2016 (Finally) Be The Year Of The Emotionally-Driven Employee Ambassador?

How to Win Customers’ Trust Without Spending a Dime

by Colin Shaw on March 30, 2016

It’s an old adage but it’s true: people like to do business with those they know, like and trust.

Businesses spend a lot of money and energy chasing that trust through marketing campaigns and slogans. Insurer State Farm advertises that it’s “like a good neighbor,” while one of my local car dealerships runs newspaper ads that say “doing business with integrity for over 59 years!”

But research – and our own experience with customer mirrors – shows that one of the most effective ways to build trust is far simpler and doesn’t cost a thing. What is this mysterious technique?

A genuine smile.

A team of researchers investigated whether a true smile promotes trust better than a forced one. We all instinctively know the difference. A true smile lights up the entire face. A forced smile can look like it’s been pasted on: the mouth is smiling, but the rest of the face doesn’t follow along.

The researchers set up a trust game, where half of the study’s participants recorded short videos asking another participant to trust them and send them money. They used identical scripts, but the stakes were higher for some participants than others.

The ‘senders’ viewed the videos and decided whether to send money, and how much. The participants who recorded the videos then had the option of returning some of the money to the senders.

The researchers found that the senders were more likely to trust and send money to a participant with a genuine smile, as opposed to a forced, or ‘social’ smile. The participants were more likely to have genuine smiles if the stakes were higher for them, and those with genuine smiles were also more likely to return more money to the senders.

The researchers used a commercial facial analysis tool to distinguish “social smiles” made by turning up the corners of the mouth, and “genuine smiles” that engage a wider range of facial muscles. They found that in addition to making a subject appear more trustworthy, a genuine smile made the subjects seem more attractive and intelligent.

These results are consistent with what we have learned in conductingcustomer mirrors. When our consultants stand in the place of customers, they carefully evaluate the subconscious and emotional elements of the customers’ experience as well as the rational and practical ones. And it turns out that subconscious elements like the quality of a smile can have a dramatic effect on a customer’s experience.

Think about customer service representatives who smile at you while telling you they can’t help you with your problem. Do you believe them? Probably not.

Here’s another example of how the quality of a smile can affect customer experience. Awhile back, a friend of mine, spent some time visiting an elderly relative in a rehabilitation facility. The staff smiled at them and took care of their relative’s needs, but their overall body language made them think that they were overworked and unhappy. In contrast, the physical therapy staff were always upbeat and energetic and seemed to truly enjoy their work and the patients. My friend found herself  liking and trusting the therapists but questioning the quality of care elsewhere.

In a retail or customer service setting, there may be several keys to creating those genuine smiles. One is to recruit employees who have passion and enthusiasm for the job. Another is to provide training in how to project a genuine smile – perhaps by visualizing pleasant or funny things while interacting with customers. A third, backed by the research, is to raise the stakes for employees, giving them incentives to improve their customer interactions.

Can you tell a genuine smile from a forced one? Does it affect your buying decisions?

To make your Customers and employees smile more improve your Customer Experience by signing up for our Certified Foundation CEM Training starting on April 8th.

LinkedIn followers get a special $225 discount by using LinkedIn225 code when making payment.

If you enjoyed this post you may want to read:

Command Customers’ Attention: The Secrets Uncovered

Customers Emotions Are Predictable

3 Things Great Companies Do For Their Customers

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 Periscope & Twitter @ColinShaw_CX

Colin ShawHow to Win Customers’ Trust Without Spending a Dime