If you are working at the interface with customers you have probably been in this situation before: Should you make a decision focusing on short-term profits and accept customer experience trade-offs or should you focus on delivering a truly remarkable customer experience? When you look at this problem from an abstract point-of-view the answer seems to be clear: of course you should focus on the customer experience.

Yet if you are facing an operational decision whether you should increase the number of agents in your customer care center or if you should save costs because service-levels are still “good enough” you know that this question is more complex. One has to accept that there are times when you are not able to deliver a remarkable customer experience and I personally believe that consciously accept these situations as outliers is not a problem. But there is one area where you should not accept trade-offs: strategic decisions.

Don’t let operational goals interfere with strategic goals

If you are truly committed to delivering remarkable customer experiences you have to form your design decisions with the customer experience in mind. Kevin Mattice has written an article where he calls designers to be arbiters of truth who protect the customer experience.

Designers should be arbiters of the truth: They should be the kind of people who stand up and tell it like it is, and that usually calls for courage. Fixing a bad customer experience requires the courage to admit that something’s wrong, and it only comes from a willingness to be transparent, to be open and honest, to communicate, and to be accountable. Good design is all that, and good designers are as transparent as they can be, even if it hurts them. Sometimes it does.

Now you might say this is a mundane statement. But just have a look at the integration of MySpace with News Corp and you will understand that this is not just an empty call to action. At News Corp strategic design decisions have been made with a focus on short-term profits instead of the long-term customer experience. If you have been wondering why MySpace lost its edge over Facebook make sure to read the article “The rise and fall of MySpace” in the Financial Times that brings light to some decisions made at News Corp. Here is the section that was most eye-opening to me:

[…] Former MySpace executives say News Corp dragged its feet over implementing Ajax, a program that allows users to send a message, an e-mail or to post a comment on their friends’ pages without having to open a new browser window. Facebook was quick to embrace Ajax but MySpace did not follow suit, partly because to do so would have reduced the number of page views the site generated and therefore its advertising revenue. “It would take five steps to post a comment or send a message, so five different pages would open,” explains another former executive. “There would be ads on each of those pages, so we were making money. We went to News Corp and said: ‘We want to change this but in the short term our revenues will drop.’ It became a long back and forth. [They] were pushing back – they wanted to make sure we weren’t going to drop our revenue numbers.” (emphasis added).

News Corp, meanwhile, contends that the request to adopt Ajax came at the beginning of 2009 – when Facebook had already established its supremacy. In other words, it was too little, too late.

Such a decision is hard to comprehend but the responsible advertising manager might have said: “Well, if we change the system now, revenues might drop now and I risk losing my job. If we keep it this way, we might lose revenues later on, but at least I will keep my job for now”.

Conclusion

Consciously making operative decisions to accept a trade-off on the customer experience can be accepted if they are indeed based on operational conditions – increased call-center activity or short-term product and service problems. Nevertheless strategic decision should never be influenced by operative goals and responsible managers have to ensure that employees are able to openly communicate – to speak the truth – when short-term profit gains might have a negative long-term impact on the customer experience.

 

Read the full article “The rise and fall of MySpace” in the Financial Times

Read the full article “The Clear Way” by Kevin Mattice

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The way we talk not only represents who we are but also influences what we might turn into. This is not just true for individuals but also for organizations. The vocabulary that is used within an organization is a mirror of the organizations culture.

How would the focus in your organization change, if your corporate vocabulary is dominated by words and associations from either competitors, shareholder value or customers? If you talk about your customers all the time, your focus tends to shift on customers and through this you could take a big step in getting closer to your customers.

With this in mind it is interesting to see a blog post by Ian Sefferman, a former Amazon employee, about the use of the word customer experience at Amazon.

Customer obsession is the single most important asset you can have as a company.

Every second of every day you should be able to know exactly why you are working on whatever it is you are working on and how that helps the customer. What about it makes their life easier and their experience with your company better?

I worked as a software developer on the Email Platform team. That meant, among other things, we were responsible for sending massive amounts of marketing and transactional mail to customers. Obviously, not all customers find this to be the greatest experience, so it was particularly important for our team to ensure that we did not send spam, and we targeted each mail directly to those customers who would be interested in receiving the mail. The words “customer experience” were perhaps two of the most uttered words on our team each and every day.

The implications for your business

Reflecting on your corporate vocabulary and how it is used could provide valuable insights about the real focus in your organization. Is your organization focused on itself and communication is mostly about your organization, its products, management and processes or do you focus on the customer and actually mirror this in your language? Is your organization’s vocabulary focused on preserving the status quo or on shaping the future? If you want to change your corporate culture, how would you need to change the language that is used in your organization?

Research Potential

I think it would be very interesting to do a analysis of documents, emails and other communication in an organization to identify the degree of customer orientation and customer focus. Doing this with a longitudinal analysis one might get an interesting measurement tool about change within an organization.

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Take a random CEO and ask him what he expects from his employees and you will very often hear that his employees should think outside-the-box, challenge the status quo and come up with radical new ideas and execute them to achieve extraordinary business results.

Even though top-management encourages employees to try something new and give them a “permission to fail”, many people do not go the extra mile but prefer to stay in a mode of “comfortable apathy”. It is too risky for many employees because if their endeavor fails, they risk their career, might lose their bonus, and in the worst case even their job. One can understand employees when they ask themselves “Why should I go the extra mile, when I can risk my bonus and career chances?”

Overcoming these challenges is difficult and there is definitely no silver bullet but with a different take on performance goals, it might be possible to stimulate the willingness to innovate and drive change while at the same time providing measure that limit the employee’s risks.

Strategic stretch goals to stimulate innovation

By reaching for what appears to be the impossible, we often actually do the impossible. And even when we do not quite make it, we inevitably wind up doing much better than we would have done.Jack Welch

The concept of stretch goals has been broadly applied at General Electric in order to limit the annual bargaining between managers and their employees on performance goals. Stretch goals should limit such negotiating and improve long-term view, stimulate breakthrough ideas and justify trade-offs in one year to harvest the benefits in the following years.

A definition of stretch goals

Strategic stretch goals are goals that cannot be achieved with what is known and how is worked today. They aim for something that is impossible today.

This definition is important because setting the wrong stretch goals will burnout your people. Such tactical stretch goals are goals that can be achieved with the current way of work and they usually result in employees doing more of the same – which ultimately means longer hours.

Strategic stretch goals really push the boundaries of what is assumed to be possible to strive for the impossible. Only when you aim for the impossible, something that cannot be achieved with existing practices, you have the “pressure” to come up with radical new ideas instead of increasing your workload.

An example

Let us assume that you have defined a 10% growth goal for your business segment in the coming year. Instead of defining a tactical stretch goal of 15% growth for next year, a strategic stretch goal would aim for a 50% growth. Confronted with such a growth target, managers would have to come up with different solutions than simply working harder and longer. Maybe new distribution channels, new partnerships or other strategies could be a solution but working longer hours will not even bring you close to the 50% growth.

The “urgency” to innovate

Defining strategic stretch goals gives employees that are willing to innovate an opportunity to realize their ideas. For those that do not see the need to innovate yet, stretch goals can create a “sense of urgency” that stimulates and forces them to work on ideas that help to achieve these goals. The point of “pressure” and “sense of urgency” is not to get people working harder. It is to get people to do things differently and raise the capability of the organization.

How can you define stretch goals in your organization?

If you have not defined stretch goals in your organization, it will be difficult to introduce the concept, define them and link them to the bonus system in your organization. Nevertheless, you could easily run a workshop where you define stretch goals and work together with other people in your organization to develop radical ideas that might bring you closer to the strategic stretch goal.

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Avenue A | Razorfish recently published the “2008 digital outlook report“. On 164 pages they present what happened in 2007 and what they think will happen in 2008 in the digital media landscape.

For many consumers, an engaging advertisement still powerfully influences their decisionmaking. But even more powerful, are the opinions they share with each other through trusted blogs and social networks. A mother in Topeka, Kansas, or a teen in a London flat can become trusted authorities, influencing more decisions than the best formulated professional branding campaign that an advertising agency can offer. Consumers are turning to a seemingly endless source of specialized media – so much so that commonly accepted best digital best practices have very short shelf lives. Yesterday’s solutions simply aren’t adequate to solve today’s problems. Is it any wonder that most businesses are coming to the hard realization that they aren’t organized effectively to respond to change?

Avenue A | Razorfish’s 2008 Digital Outlook Report examines where that digital spend is going. We provide direction on how marketers can align their organization to respond to the new digital environment, as well as a framework for effectively managing emerging channels and social media. And we give you some interesting new insights into consumer behavior.

The chapter “ten digital media issues to watch in 2008″ is especially interesting, so watch out for:

1. The move beyond media buying
2. The impact of a recession on online advertising
3. The redefinition of online media measurement
4. A limited increase in average CPMs
5. The fallacy of the “digital upfront”
6. The slowing of ad network acquisitions
7. A breakout year for mobile—but not for mobile advertising
8. Nokia’s emergence as a key player in the digital marketing industry
9. The continuing lack of video ad standards
10. The Internet’s impact on the 2008 presidential election

For me personally issue 8 “Nokia’s emergence as a key player in the digital marketing industry” provided new insights.

Nokia made two important moves in 2007 that will impact digital marketing in the coming year. It acquired both Enpocket, a leading mobile advertising and marketing services firm, and Navteq, a leader in navigation data and systems software. While there have been no formal announcements from Nokia about how its assets will fit together, it is clearly going to be a company to watch in the coming year. Nokia appears to be vying to expand its own business outside of consumer mobile devices and into the software and services that consumers are able to use on those devices.

Nokia now has assets that may accelerate the use of smart devices that use location-based services that know where we are. The potential benefit for marketers is the ability to deliver relevant, geographically contextual advertising opportunities to customers. Accomplishing this feat in the U.S. today, while not impossible, often involves orchestrating a small army of carriers, devices, marketing services providers, and agencies whose interests are not always aligned.

Download the full report.

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Customer Insight is the first step when designing interactions with customers that create remarkable experiences. The challenge is not to capture the explicit customer requirements but to understand the implicit requirements and latent needs of your customers.

The article “Deeper customer insights – Understanding today’s complex shoppers” published by IBM Business Consulting Services provides some valuable insights into customers in the retail industry.

Here are some excerpts of the report:

Five “megatrends” for 2010
[...] we identified five deep-seated trends that are reshaping the business environment [...] :

• Customer value drivers fragment
• Gatekeepers become more guarded
• Information exposes all
• Megaretailers break the boundaries
• Partnering becomes pervasive

These megatrends are driving the industry to a “world of extremes” where customer diversity and individualism are pervasive, and traditional segmentation is rendered inadequate. Customers demand low prices for basic goods, but pay premiums for products that matter more to them personally. Consequently, those best positioned to grow and succeed will be huge megaretailers on one end of the spectrum and targeted retailers on the other, while undifferentiated companies, lost in the middle,
risk fading into irrelevance.

Corporate thinking thus needs to switch from “bell curves,” where firms try to serve a generic mass market but do not meet anyone’s needs particularly well, to “well curves,” where companies drive growth by applying distinct models in each part of their business to deliver the greatest value to explicitly defined groups of customers.

A customer value cube is used to describe the value expectations of retail shoppers.

Another interesting chart are very/extremely important shopping services and features.

Groceries

Apparel

Download the full report.

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