theIdeaStudio (Customer Crossroads)

Cell Phones for Paying Bills: What's Taken So Long?

Tom J. Manessis, head of emerging opportunities at VISA says, "For U.S. consumers, it has to be simple to use", in a Businessweek story about paying by cell-phone, Will that be Cash, Credit or Cell?, by Roger O. Crockett.  I don't think it's just US consumers, Tom. 

In fact, excessive complexity is probably what has sunk this development to date, since we've been hearing it touted as "coming soon" for at least five years now. 

Sam Pitroda, CEO of C-SAM,  says he has been focused on ease of use.  Thank you, thank you, thank you.

So often, exciting developments of this type sink under attempts to take over the world, instead of focusing on improving a few consumer experiences and making them dramatically better. 

We don't need to apply for loans via keypad on our cell, or make mortgage payments this way.  In fact, last time I researched it, not many people wanted to trade stocks this way.  But it would be nice to perhaps pay for a cab, buy mints, buy a newspaper, a subway token, or other small purchases in a simple way. 

I have heard from many consumers that they hate cluttering up their bank statement with a lot of small debit purchases.   

Dexit is supposed to solve this problem by providing a key-fob device that you reload at $1.50 per.  It does mean carrying another device, and it requires it's own infrastructure.  (I pity the poor merchants who have to figure this all out.  Wonder what their customer experience feels like?)

However, things are looking good on the cell-phone payments front these days.  Can your cell-phone provider give you a simple sign-up process?  Stay tuned. 

Marcus Buckingham on Leadership

For a good interview with Marcus Buckingham on his latest book about leadership, click on Management Consulting News.  Here's an extract to whet your appetite. 

We need a leader to tell us: Who, precisely, do we serve? What is our core strength? Of the many things we can measure in our business, which one measure of success should we focus on? And, what specific actions can we take right now to improve our business?

He also suggests that leaders evaluate their own impact in terms of their followers.  Now there's a frame of reference that means something!   

Leadership is not some abstract introspective thing -- it's about making things happen in the organization.  When things aren't happening, few leaders look to themselves first, which is where they need to start.  Are they walking their talk?  Are they doing something every day to make their ideas concrete for people?  Have they distilled their goals into words a ten-year-old could understand?  Or are they going around asking "why people don't get it?". 

I think I'm going to have to read the book. 

Thanks to Mike McLaughlin at Guerilla Marketing for drawing this to my attention.

Using Blogs to Conduct Research

There's a nice article from Eric Myers over at ICE about how to use blogs to keep tabs on what's happening in your market space, what your customers are saying about you, and so forth.  Well worth the read, I'm just sorry he wrote it before I did. 

Yellow Pages Wakes Up to Threat from Google Local et al

Yellow Pages seems to have awakened from a deep slumber and realized their business is under serious threat.  When I got my new Yellow Pages directory last week, the bag contained something new: my phone number has been converted into a web directory complete with a map. 

You need the whole number, complete with area code, and must add .yp.ca to the end.  But by golly it works. 

I also tried searching for bakeries near the office, and that worked okay as well -- I found the Hillside Scandinavian Bakery, which I must have walked by a hundred times and never noticed.   

You will recognize Yellow's new service as an imitator of the still-superior Google Local, a very useful service. 

I used to have an analog version of this, when I worked in Calgary some years ago.  I was constantly needing to meet people for lunch, and I started maintaining a small directory of suitable cafe and restaurant listings by location. It was so useful that when I moved to Toronto, several buddies asked me if they could have a photocopy. 

When I got a Visor (one-time-Palm-competitor) I was hoping to program something similar for myself.  I've never really achieved this, despite acquiring a "learn to program your Palm" book, and a small database program called I-Data Pro. 

Google local is useful enough that I could see myself actually getting a wireless handheld just so I can have access to this kind of functionality. 

I doubt if this will be enough to save Yellow Pages, but at least they're making a meaningful effort. 

Credentialing, Exams, and Personality Type

Please accept our apologies for a general lack of quantity on this blog over the last few weeks.  We were studying for a seven-hour exam that we finally wrote last Friday.  Phew! 

A couple of observations:

First, have you noticed that practically every organization under the sun is trying to credentialize themselves?  Coaching designations, Professional Organizer designations -- a marketing research designation in my case -- where will it end?  Is this a good thing?  What does it all mean?  Anyone?

Second, I feel very blessed to be an Extraverted Intuitive type when I'm writing exams.  We think and respond quickly to situations, which gives a definite advantage when writing seven hour back-breaker exams.  This particular one required pretty much non-stop production of words for the entire event, and I barely finished. 

I spoke to several people who did not finish all the questions.  Professional level exams are not designed for Intraverted Sensing types.  These are people who need time to process their thoughts, and generally want to check their work carefully. 

They don't do as well on exams at the graduate level.  Not because they are not as smart, but because they are not as fast. 

There's a wonderful story about just such a person on their third attempt at a professional designation exam, who decided to "just put anything down, like an idiot" and finally passed the exam. 

A year ago I qualified to administer the Myers-Briggs Type Indicator (r) -- the exam for which had basically no time limit.  It took me about three hours to write, but there were several who took five hours, just because they were careful in their approach.  Now wouldn't it be nice to see more thinking like that?

Flathead, Phillips and Robertson: Sony Beta Backwards Deja Vu or How Distribution Affects Your Life

Seth Godin has started something again by talking about the superior characteristics of the Robertson screw, a discussion picked up by Karl Long and others.

We Canadians puff up with pride over this baby, but it's actually more of a testament to stupid marketing a la Sony Betamax.    

According to Mary Bellis, the Robertson was invented in 1908, 28 years before the Phillips was invented.  Robertson screws were used in the assembly of the Model T.  So there were some genuine early advantages there, which a sensible business owner could have capitalized on.   

However, Mr. Robertson was not sensible, he was a Canadian.  Despite all sorts of foolishness you can read online about how "Americans are finally catching on" to the joys of the Robertson, this screw should have been more ubiquitous than the Phillips.  It was marketing and distribution strategy that failed, not inventiveness. 

Here's the Wikipedia version of the story:

Robertson had licenced the screw in England but the party he was dealing with intentionally put the company under and purchased the rights from the trustee thus circumventing Robertson. He spent a small fortune buying back the rights. After that he refused to ever allow anyone to make the screws under license. When Henry Ford tried out the Robertson screws he found they saved considerable time in the production of the cars but when Robertson refused to license the screws to Ford, he realised that the use of the screws would not be guaranteed and stopped using them. This largely explains why they never became established in the United States.

Today Robertson screws are scarce in the United States, accounting for 10% of screws sold, while being very common in Canada, where 85% of the screws sold use the Robertson head.

 

Wiki says the patent expired in 1964, so hopefully this long-ago mistake of management can be corrected.  My prediction?  Canadians will soon be importing these screws from the US, but they will have been manufactured in China.  

The lesson?  You can build an innovative product, but you'd better get the distribution thing right, or there won't be any foundations named after you. 

Getting the Peaks and Valleys of Customer Experience Right

If you can't fix anything else about your customer's experience, make sure the end of it is as positive as you can make it.  Because... when we evaluate our memory of an experience, we are biased towards remembering the end, and the peak (either positive or negative). 

I found this out because I've been reading a lot about the work of Daniel Kahneman, a Nobel Prize winning Psychologist, who studies cognitive illusions.  These are not like the visual illusions you may have seen.  Cognitive illusions are mistakes of judgement, not perception.  Kahneman studies illusions to understand the wiring, as it were, of our decision-making processes.   

Kahneman and his colleagues studied a number of situations, such as painful medical procedures, which were evaluated by patients as less unpleasant if the end of the procedure was less unpleasant than the preceeding part. 

For a more everyday example, consider children's dentists, who often give a treat out at the end of a visit -- they figured out a successful strategy to manage the memory of the event.

In a few days, I'll be headed to Algonquin Park for a week of canoeing and listening to loons. I wish it were going to be two weeks.  But I can take comfort in knowing that my evaluation of the holiday will be heavily influenced by the peak event (good or bad) and the end of the trip.  Duration of the trip, according to Kahneman, doesn't count for that much. 

There are some other things Dr. Kahneman has figured out that we are going to plop down on the desk and poke around here over the next few posts, but this one is huge, don't you think? 

So here are a few questions to think about:

• What are you doing to ensure that the end of an interaction is as positive as possible?  Are you wrapping things up in pretty tissue and sticking a gold seal on them?  Are you telling your customer what a wise choice they have made? 
• If we could meter your customers from beginning to middle to end of their experience, would there be a nice peak somewhere ... a positive peak? 
• When you are handling complaints, are you making sure to offset that negative peak with something more positive? 

We've become rather sloppy in the management end of the business community; we aren't doing a great job of extracting and using the best learning from academic research, instead relying on personal intuition and traditional management practices.   It's time we marketers and managers grew up, and started getting a little help from the behavioral sciences, instead of thinking we learned it all in Psychology 101.   

Branded Customer Experience and Retail Banking: Holy Grail or Empty Vessel?

Branded Customer Experience is a phrase you can expect to hear a lot in the next few years:  it's the new Holy Grail of services marketing.  There are a few branded customer experiences in services out there, but not many.  Ritz-Carlton and Starbucks come quickly to mind.  Avis may be a contender.   SouthWest Airlines is in the club.

Some industries, notably retail financial services, are struggling with a long term battle against commoditization.  Branding is clearly the solution of choice, having worked so well in the packaged goods industry.  But the packaged goods leaders have not stopped at branding, and are starting to focus on customer experience. 

Producing a customer experience that is distinctive in a service industry, where human beings must deliver the distinctiveness, is generally thought to be closely tied to organizational culture and values.  If you want to change the customer experience, you have to change the organizational culture.

Here's where things get tricky in financial services.  Most of the major companies in this industry have built value for shareholders through investing in technologies to streamline operations, and manage customer profitability. 

Deep diving into customer experience to look for ways to build emotional connections has always played second fiddle to analytic initiatives designed to optimize the pricing on bundled service plans, or reduce the time spent handling individual customer transactions, and other initiatives of that nature.  And let's be honest -- this type of thing has paid off hugely in managing creeping operational costs .

Investments in data warehousing and CRM have improved direct marketing effectiveness and relationship management, but haven't touched customer experience design issues, which remain almost unchanged from a decade ago. 

Until retail banks work at developing more of an emotional bond with their customers, the idea of 'branded customer experience' is an empty vessel. 

The strength of these organizations in analytical risk management and operational excellence actually works against them when it comes to designing exciting and innovative customer experiences that resonate on an emotional level; there's really very little interest in making the fundamental mental shift necessary to mobilize around this objective. 

To see why, you need to look at the culture at the top of these organizations, where marketing has none of the status that it has in consumer-goods industries.  The senior executives of large financial services firms generally cut their teeth on corporate or institutional banking, as deal-makers of the first order. 

A common view of retail banking is that its chief purpose is to gather the low-cost deposits necessary to fund the deals, and provide predicatable returns to support the stock price. But the retail business itself is not exciting enough to hold the attention of a deal-making executive for long. 

And this represents a huge difference between the financial services industry and packaged goods, where you need to be excited about the opportunities presented by household cleaning, cheese products, and feminine hygiene.   

A second difference, and not to be underestimated in either financial services or telecommunications is the presence of annuity income.  These aren't real annuities of course, but revenue from activities that happened months or years ago.  If you are in consumer goods, you cannot count on a single nickel of revenue to come your way unless you sell something.  You need to be nimble if you want to stay alive.  In businesses that have continuing "rental" income, the worry is always that you will do something to damage the golden goose.  It tends to make the cultures relatively risk averse.

I've really written this post for my colleague, Taimour, to support an ongoing conversation we've been having about the meaning of branded customer experience. 
Well Taimour, I've depressed even myself with this explanation.   

Are there bright spots on the horizon?  Yes, absolutely.  Brave and clever middle-level executives that are on a mission to change things.  We need to give them all the help we can, becuase they have a big hill to climb. 

Designing Customers Experiences: the next big thing

Having ranted on for some time now about the importance of customer experience, and the role of design in same, I felt quite joyous at the latest issue of Fast Company, which is all about design. 
If you aren't a regular reader, you should pick this one up.  The "Proctoids" anecdote alone is worth the cover price.  [What P&G would do with Altoids if it acquired the brand] 

My prediction is that this anecdote replaces the "glove story" in John Kotter's "Heart of Change" book as the favored anecdote to make a point about change. 

Designing a customer experience means going deep into what is happening now, how people feel before, during and after.  It means looking for emotional connections, not just rational ones.  It means adding things in that might not "make sense" in any classical business sense.

I'm beginning to hear the phrase "branded customer experience" a lot more these days.  Well, there are a few of them out there, but not many.  Ritz-Carlton.  Starbucks.  Disney, of course, the experience granddaddy.  Probably quite a few universities and private schools have a branded customer experience -- Harvard, Oxford, Queen's, Eton ... no doubt there are many more there. 

It's a small club -- there's still time to be a charter member.  What are we waiting for?