Customer Crossroads

Web 2.0 watch: how to build your own anything

You may think you have heard altogether too much about web 2.0. But in fact, it's like seeing a big boat slowly move across a lake -- you can hardly believe the size of the wake when it finally hits shore. In my usual Agatha Christie / Miss Marple way, I hope to draw some interesting ideas from some applications you've seen or heard about.

Instructables
Here's a personal favorite:  Instructables.  There are instructions from ordinary people here on how to do everything from avoid having to sort laundry to building your own Computer Numeric Controlled Router from scratch. I'd really love to have one of those, but it's a bit beyond -- actually WAY beyond -- my assembly abilities. Here's my own modest contribution to the pool of learning.  The site is extremely easy to use. Explore only at your own risk, because honestly, if you have a creative bone in your body, it will take you half the day.

This site is primarily built around visual instruction for things that have a physical world presence. Like laundry, lathes, earrings. I haven't seen any instructables yet about how to set up a trust fund. But why not, really?

Imagine cross-breeding Instructables with banking and investments. What we see today are a lot of bulletin boards that have disjointed information provided by investors and home budget gurus. What if this kind of information were more carefully harnessed and structured?

Implication of all of this: as information about how to do things continues to get easier and easier to find, by itself, it won't have much market value.
What this means for you and your service business:
--> you need to keep raising the bar on the knowledge and skill you are selling. Because low level knowledge and skill is free
--> you should be thinking about ways of taking existing platforms and leveraging them for your own content. Get out there, get in the conversation!

Are they consumers or customers? Getting your marketing lingo straight

When I first started in the marketing research biz, a friend and mentor told me I needed to fix my language, and start referring to the target of research activities as "consumers". I'd been marking myself as a neophyte among all the advertising and packaged goods people  by calling these folks "customers".

My real problem was that I'd crossed over from a world where the buyers of your services have individual names (financial services), to a world where the buyers of your goods are largely a nameless mass (most consumer products).

After a little research, I found the definition and compiled and created the list below, adding some handy-dandy examples for each attribute.

With this convenient de-coder list in hand, you too will be able to spot people who have crossed over in some way, and are calling apples by an orange name.

What's the difference between a product and a service, really?

Here's a nice definition for a service:

"Any act or performance offered that is essentially intangible and does not result in ownership of any thing"

                    - Prof. Brian Engelland, MSU

There are many more attributes that we can dig down into, however, to understand why services and products are very different. Here's my list.

You are dealing with a service when...

[1] Production and consumption are hard to separate. Examples: travel, investments

[2] Intangibles form a large part of what is being purchased. Examples: insurance, consulting

[3] There is no change of ownership. Customers typically rent a service, rather than owning it. Examples: credit card or loan, hotel room

[4] A sale that does not happen today cannot be recovered in the future. Examples: empty seats in a theatre, lost interest on a mortgage

[5] Customers must evaluate the purchase decision with few tangibles to go on. Examples: health care

[6] Output quality is variable, and depends on the performance of individuals. Examples: Hair styling, interior decorating, surgery

[7] Manner of dress, body language, and expressed language form part of the brand experience.  Examples: air travel, retail banking

[8] Cycle of purchase is repeated through 'rental payments'. There is no smooth movement through a consumption cycle, and there are frequent 'moments of truth'.  Examples: health club membership, anti-virus software rental, weight-loss groups

[9] Employees behavior and knowledge is central to delivery and quality. Examples: financial planning

[10] The memories of the experience may be as important as the experience itself. Examples: vacation travel, theme parks

[11] There are high degrees of customer contact during production. Examples: health care, spa services

[12] Competing offerings may differ in how much of the work of production is shifted to the buyer.  Examples: online brokerage vs. full service, self-serve vs. full service gas station

[13] Suppliers assume real economic risks (exceeding the revenue potential) by choosing a given customer. Some interested customers must be rejected. Examples: credit cards, insurance, auditing

[14] Customers assume real economic risks (exceeding the fee paid for the service) by choosing a given supplier. Examples: mutual funds, home insurance

[15] Everyone calls them clients, users or customers, rather than consumers

So now you know. There you have it. Try to keep your customers and your consumers straight now, okay?

Understanding the difference between customers and consumers gives you some important insights into underlying truths that truly do affect decisions about marketing and other real world issues.

Resources:

The graphic came from the Prelinger Archives, from a composite movie called Much Better.

Shaping Customer Visits: McKinsey reports on bank branches

According to McKinsey, banks worldwide are spending a lot of money refurbishing bank branches and not getting a lot of return on their spending. Why? Because they have focused on the aesthetics of the environment and ignored the customer experience.

They probably thought they were addressing the customer experience, but they were only addressing the environment. And even there, it seems there was too little focus on designing an environment that SHAPES the customer experience, rather than just LOOKS NICE.

"However, banks have done little to shape customer visits. The challenge includes meeting or exceeding customers’ service expectations to increase trust and loyalty, uncovering latent purchasing demand, and converting those leads to actual sales later."

McKinsey suggests focusing more on lower-cost tactical initiatives -- which could include things like making the lineup experience more informative and entertaining, having more interactive events, etc.  All of this they suggest putting into the context of clear objectives. [How can we disagree with someone who wants clear objectives?]

So all those executives listened to the stuff about good design, they just didn't put it into a strategic context. You should try to avoid making the same mistake. Great upholstery does not equal a great experience. Thinking clearly about customer needs, wants, behaviors and processes might take you to some places where you can get real improvement. But it's definitely going to be about more than the wallcoverings.

Find the article:
It's well worth reading, if you happen to have a subscription lying around somewhere. Here's the link: http://www.mckinseyquarterly.com/Financial_Services/Banking/Bank_branches_that_meet_customer_needs

But you do need a subscription.

How To Talk to Customers: Book Review

This wee blog now seems to attract enough attention that I fairly regularly get books to review. When "How to Talk to Customers" arrived a few months ago, I was busier than an an ice-cream truck at a beach. So the book went onto the pile of reading, and didn't really get looked at for a while.

I was pleasantly surprised to find a very practical volume with quite granular advice suitable for front line customer service situations. Authors Diane Berenbaum and Tom Larkin are principals of a company that provides customer service training, and this book presents many of the ideas that they must use in their training and workshops (see resources).

If you are looking for something of a strategic nature, this is not the book for you. But if you run a front-line service area as a supervisor or manager, you can probably use a lot of what is suggested in this book. 

MAGIC

The authors' big idea is the acronym MAGIC (Make A Great Impression on the Customer), which runs through the book as a theme. It took me a while to figure out that they actually had a much more useful version of this acronym, as follows:

M = make a connection: build the relationship

A = act professionally: express confidence

G = get to the heart of the matter: listen and ask questions

I = inform and clarify what you will do

C = close with the relationship in mind

Every section has examples and stories -- "Magic Moments" and "Tragic Moments". There are lots of details on very granular topics, such as how to use a customers' name, how to personalize interactions, and how to listen with empathy.

I found it almost too granular, personally, which means it is probably exactly right for front line staff. When they state a principle, they usually provide a couple of specific examples of a snippet of conversation to illustrate the point.  Each of the five magic principles above translates to several standards, 33 in total. I have helped a few organizations develop service standards, and this list would make a great starting point for anyone.

Coaching

My favorite section was on coaching. A great deal of attention has been paid to the idea of coaching performance, and for a good reason -- it works. However, a lot more people talk about coaching their staff than actually do coach.

The chapter on coaching provides  a solid process for actually talking to your staff in a coaching session. And also makes it clear that a coach must be able to model the desired behaviors -- to walk the talk.

First impressions

Oddly enough, the reason I had trouble engaging with this book was due to poor first impressions. A book this tactical should probably be in a coil binding, not a hardcover binding, and it should have headers and footers that quickly help you locate your position in the 33 standards. It could have used some color and simple graphics to help me navigate this many concepts. And just from an aesthetic standpoint, I didn't like the feel of the paper.   

I was about half-way through the book before I decided it had pretty good stuff going for it, largely because of the visuals.

Resources

How to talk to customers: create a great impression every time with MAGIC, by Diane Berenbaum and Tom Larkin. Jossey-Bass, 2007.

Available from Amazon US here, Amazon Canada here, and Chapters-Indigo here. 

The authors business site is Communico Ltd.

The image is from the Prelinger Archive of films. This one is from a scream called "Are you popular" made in 1947.

The latest news on multi-tasking and what it means for customer experience

Luth Research recently released their IndicatorEDG report on multi-tasking. It looks like we are spending more and more time -- on average, 20 hours a week -- attempting to do two things at once.

"On average, 17 percent of our time awake -- approximately 19.80 hours per week -- is spent using two or more media simultaneously, according to the latest quarterly findings (Quarter 1, 2007) from Luth Research's IndicatorEDG™, an online study surveying more than 5,000 respondents in the U.S. The media in question included all mass media (e.g., TV, radio, Internet) and personal electronic devices (e.g., cell phone, MP3 player, wireless email device)."

Those who aren't employed spend more time in media multi-tasking -- no surprise there. But so do retired people, who average close to 26 hours a week in media multi-tasking. [So your suspicions are correct -- Mom or Dad really are watching the TV while talking to you on the phone.] 

And most of this media multi-tasking is TV together with something else --

"Watching TV was named by nearly half of the respondents to be what they typically do
when working on the Internet or email through a computer. One in five people have their TV on while using their cell phone to make phone calls. TV seems to be a natural fit to co-own consumer time and space with other print media, as 20 percent of the respondents cited TV as the medium they were also using when reading a newspaper, a magazine, or a book."

Those that are spending more time media multi-tasking report that they are less happy overall than others.*

What does this mean for customer experience and customer communications?

If you thought it was hard to get people's attention before, guess what? It's going to get harder. So clarity in all communications is essential.

In these circumstances, is it realistic to expect people to absorb the fine print, or read between the lines of your offer?  Probably not, in my view.

Greater redundancy in communication is also a good idea. Don't assume people are actually informed about your policies or product features or hours of operation. Make it clear, easy to find, and say it often.

If it's directed at anyone who is retired, make the print on the box big enough to scan at a glance, because that might be all it gets.

And your advertising had better be interesting enough to compete with other media. Even if it's only getting half an ear or half an eyeball, it needs to get a message through.

Resources and notes:

Here's the link to the five-page PDF report: IndicatorEDG Research: Media Multitasking

* Note that this should not be construed as a cause -- perhaps the multi-tasking is a response to other life circumstances, which are the underlying cause of the unhappiness

Why trust is essential to your brand and your service: lessons from the lemonade stand

Walking through my neighborhood yesterday I passed a lemonade stand. I may be steeled to the solicitations of street people, but this little girl had me licked. Fortunately, her lemonade was a) good, and b) only 25 cents a glass.

She was pretty little, younger than the girl in this picture. And she really wanted to hand me the glass and take the money in the same instant, with the same hand if possible. She wasn't yet used to the trust that pervades even the simplest of business transactions. She didn't want to take the money first, but she also didn't want to hand over the lemonade without getting the money. [We worked it out without spilling a drop.]

This interaction reminded me that trust is fundamental, even foundational. The simplest exchange relies on it. I imagine the earliest hominids trying to make exchanges.  It isn't easy to transact if one person can't go first.  [After all, you don't want spilled lemonade all over the place].

There are mechanisms in business to transact with people you don't know and don't trust, but they're all complicated things, like letters of credit. Even then, we would consider most people foolish to do business with anyone they actually do not trust at all, regardless of how secure the transaction seemed. So even things like credit cards, which resolve many risks related to payment, don't overcome the trust gap. If people don't trust you, they can't do business with you.

Very often, we trust first, and distrust later. You earn the distrust by losing the trust.

What all this means to me is that any loss of trust with your customers is not minor. If you make promises you don't deliver on,  you have proven yourself not trustworthy. If you surprise people with hidden fees, you have proven yourself not trustworthy. There are a gazillion ways to erode trust, and really only one a few ways to build trust. You build trust by doing what you say you are going to do and doing it in a fair, open and transparent manner.

Changing customer behavior and expectations: wine industry

Way back in January 2005 I posted about buying a quality wine with a screw-top: an RH Phillips. I wondered how long it would take for new packaging to take hold. Wine, after all, has long been a product that is a badge for social class, education and purchasing power. 

As their affluence rises, learning about wine, and drinking more wine, has been one of the things upwardly mobile families aspired to. If nothing else, it signifies the availability of greater disposable income. It also flags a more sophisticated palate than that required for a rum and Coke, and very likely the food to go with that sophisticated palate. Wine just works on so many levels as a badge of social status. And the cork, of course, was a signal of quality wine. Winemakers wanted to use screw-tops as a quality control device, to eliminate 'corking', which ruins the taste of eight to 10 per cent of wines.

Since then, a lot of change has happened.

Screw tops take off

The San Francisco Business Times reported in June (Wine.com toasts higher screw-top sales) that screw-top wines now account for 17.5% of wine sales of Wine.com, a large online wine dealer. Not only that, but some very good wines are being sold in screw-top bottles, according to the article.

"The Wine.com web site features a section devoted to wines with screw caps, nearly one third of which are rated 90 points or higher by wine critics and publications such as Wine Spectator, Wine Enthusiast, Robert Parker and Stephen Tanzer, the company said."

"Two Buck Chuck", as Charles Shaw wine is nicknamed, won big against some heavy competition recently. Their 2005 California Chardonnay received 98 points (a good thing) and a gold medal at the commercial wine competition at the California State Fair, as reported in the Napa Valley Register.  Not only is it a screw top, it's just about the cheapest wine around.

Wine breaks out of the bottle

French Rabbitt, a quaffable and inexpensive wine, introduced the Tetra-Prisma container for wine. It's unbreakable, lightweight, and easy to open. Perfect for casual dining situations, according to the French Rabbit web site:

"The French Rabbit Tetra Pak container is portable and lightweight so the wine is great to enjoy on the patio, camping, at a picnic, poolside or dockside! They are easy to open (no need for a corkscrew), shatterproof (no broken glass!), cool rapidly and are resealable (squeeze the rabbit!). With its convenient design, French Rabbit wines are the ultimate takeout for your next social gathering."

The company also says the lower overall weight of packaging makes for reduced environmental impact through shipping. It's not just convenient, it's also green.

Pret a Boire has provided an even more convenient package. This one reminds me of a wine-skin. The website has advice about how to keep wine cold in your backpack, and how to use a stream to chill your bottle of wine when out hiking. And it reminds us of the lower shipping costs and hence lower environmental impact of the package.

Lots of others are now on the bus, as you can see from the variety of Tetra Paks shown below.

I did rather feel sorry for the Yellow Jersey people when the Tour de France started having drug problems again this year. On the other hand, perhaps that's OK if you're selling wine. This wine, sourced in France, is apparently only available in Ontario, and comes in a PET plastic bottle ... with a screw top, of course. The makers are Boisset, the same people behind the French Rabbit wine shown above.

So the traditional bottle of wine and cork experience is under assault from many directions. Oddly enough, the challenge for those who actually understand wine, is that these wines may look cheap and unacceptable as gifts, even when they are good wines. As for example, the RH Phillips wines, which are high quality for their price. (IMHO)

It may be that these wines are only for those confident in their own taste, and those who have preconceived notions of wine. However, I suggest that the joy of uncorking may well be something that your grandchildren will not experience.

Behind the scenes

A number of these packaging initiatives are actually part of an LCBO initiative to reduce packaging waste from single-use glass wine bottles. For those not resident here, LCBO (Liquor Control Board of Ontario) is likely the largest single purchaser of wine anywhere, since they have exclusive control over the wine and liquor trade throughout Ontario. Not everyone thinks this approach is actually very environmentally friendly -- Usman Valiante, writing in the Solid Waste and Recycling blog believes that the green agenda is actually being used to hide the real commercial agenda, and that LCBO is actually trying to build house brands and thereby increase margins and ultimately their profits. Interesting reading, although a little outside our beat.

More about the PET bottle is here. (Links spawns a PDF window -- scroll through to page 6)