How To Generate Credibility

One of the most important hurdles for a small business is to create and sustain credibility. If you're not credible, Customers won't believe you can deliver on their needs and desires. So how do you generate credibility?

In his 1985 book The Regis Touch, technology marketing guru Regis McKenna offers a helpful three-element framework:

1.  Evidence.  Evidence includes anything that has been researched or documented. It can include product validation research, Customer evaluations and ratings, and even success performance of the company itself ("Success in the market reinforces itself.")

2.  Reference. Reference is positive statements and testimonials from others. When others say good things about you, keep a file. If you show up positively in the press, keep a copy. If you win an award, promote it. And by all means, solicit, collect and use testimonials from "typical" Customers and satisfied users.

3.  Inference.  Inference is a plausible link or tie-in to something or someone who has independent value or reputation. If you land a major recognizable account, publicize it. If you're recognized by a consumer advocacy organization or agency, let people know about it. If one of your Clients is a major celebrity, get their endorsement. People will infer that you must be a credible business because "they" trust you.

It's important to build and sustain credibility to offset today's FUD factor: Fear, Uncertainty and Doubt. With all that's going on in the world — and in your local community — give people solid reasons to trust you. Give them Evidence, References, and Inferences.

//Richard Randolph

What Every Business Should Know About Their Customers

1.   Who are our Customers?

a.  Who are our best Customers (Pareto Principle: 80/20 rule)

b.  Segmentation: Demographic, Geographic, Psychographic

c.  “RFM”: “Recency, Frequency, and Monetary value.” RFM analysis is a technique for segmenting Customers into groups based on their behavioral responses

d.  Personas: a vivid description of a single archetypical Customer

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What’s the difference between Segmentation and Personas? Here are a few highlights of the differences thanks to Frank Capek in his post "Customer Innovations: Driving Profitable Growth":

What is the Difference Between Personae and Segmentation?

•  Personas are used for designing experiences that get the Customers’ attention, fit with the way they think about what they’re trying to accomplish, and map easily onto their natural set of behaviors; 
Segments are used for making strategic focus and prospect targeting decisions based on the attractiveness and accessibility of different types of Customers.

•   A persona is a vivid description of a single archetypical Customer;
A segment is an abstract group of Customers that share certain characteristics.

•   A persona includes a rich description of how that specific Customer thinks, acts, and experiences the world; 
a segment typically includes descriptive or situational information about the group of Customers.

•   A small set of personas can be used to illustrate the fundamentally different types of Customers that exist in the marketplace;  segmentation is used to create a comprehensive mutually exclusive, collectively exhaustive (MECE) representation of an entire marketplace.

•   Personas are qualitatively derived based on observation and in-depth elicitation interviews;
Segments are quantitatively derived from large samples including demographics, situations, behaviors, and attitudes.

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2.  How much are they worth to us?

     Customer Lifetime Value   See:

•  Harvard Business School Publishing “Customer Lifetime Value Calculator” 

•  Integrated Management Resources Inc. “Lifetime Value of a Customer Calculator”

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3.  How do they feel about us?

Net Promoter Score:  See “The Ultimate Question” 

(1) “How likely is it that you would recommend our company to a friend or colleague?” 

  (2) Follow-on question: “Why did you give us the score you did?”

//Richard Randolph

CEM Customer Experience Management

Here's an outstanding presentation on where Customer Experience Management is headed. Leading-edge thinking, this.  Enjoy!  //Richard

Check out this SlideShare Presentation:

CEM Customer Experience Management

View more presentations from Paul Roemer.

Customer Service Revisited: The Three Levels

Scott McKain has redefined “Customer Service” in his excellent book What Customers Really Want. He identifies three levels of Customer interaction.

Level One: Customer Processing

This level is about expediting the transaction. The computer screen or preprinted menu tell the clerk what to do and say — they never have to even look at you or use your name. Just follow the procedure, finish the transaction, and on to the next in line. You see this level any time there’s a line: in the grocery store, in the fast-food restaurant, at the toll booth… The emphasis is on turnaround time, not on hearing or satisfying the Customer. Example: I enjoy a good Subway sandwich. In fact, I think they have single-handedly redefined the fast-food industry. They want to know what kind of bread, meat, cheese, and toppings I want. And it’s all Processing. Sure, it’s customized a little bit – but not much. They’re all the same, and after minimal training, just about anyone can do it. Strategic implications: Customers appreciate improving the speed and efficiency of a transaction — but it’s easy for competitors to duplicate.

Level Two: Customer Service

At this level, the emphasis changes to understanding the emotional dimension of the exchange. The focus changes to listening to what the Customer wants and actually needs — there’s some effort to understanding “the job” the Customer is trying to do, and what it will take to accomplish the goal. It’s more “human being to human being.” True Customer Service invokes a relationship, even if it’s a short one, where the Customer and the Provider are both involved and actively engaged in achieving the desired outcome. Example: I went to the Apple Store so I could get a good microphone to record Podcasts and PowerPoint narratives. The representative listened to and understood my needs, then presented three options along with the “plusses and minuses” of each one as it pertained to my purposes. “By the way,” he said, “Have you ever tried Keynote?” (it’s Apple’s alternative to PowerPoint.) “Never heard of it,” I replied. “Watch this!” he exclaimed, and walked me through a brief demo and showed me some of the innovative features. Wow! Guess what I bought…???  Strategic implications: True “service” is people-dependent, and technology enabled. To achieve this level, you have to hire smart then train and invest in excellent people, and empower them to do what they know how to do so well. It’s very hard to replicate this level of delivery — you can probably name just a few firms who truly deliver on the Customer Service potential.

Level Three: Customer Experience

At the top of the pyramid is the total Customer Experience — the sum total of everything that happens from the time the Customer first learns of the company’s offerings (advertising, word of mouth, referrals, etc.) through contact with the company (on line, on the phone, or at a store), through the purchase experience, on through support, billings, upgrades, renewals, service failure recovery, Customer Satisfaction surveys, and so on. It includes all the sensory and emotional dimensions in addition to the physical and financial portions of the transaction. Remarkable Customer Experiences often leave long-lasting memories. They also build Customer loyalty, along with the positive word of mouth, referrals, and increased patronage (spending) that go along with a totally happy Customer. Example: I guess the Disney organization is most frequently mentioned in this category, but they’re not the only leaders to consider. You can think of one true industry leader in most fields who exemplify the remarkable Customer Experience (retail? On-line shopping? Automobiles? Even groceries!) Strategic Implications: A Remarkable Customer Experience is a powerful differentiator. It tends to remove Price as an issue, and it builds long-term brand loyalty.

Look at your own business to see where your Customer interaction falls. Do you Process numbers in a line? Or do you deliver personal Customer Service? What would you need to do to deliver a consistently remarkable Customer experience? That’s where the long-term gold is! 

//Richard

The Three Faces of Customer Service

Many small business owners (not to mention the big businesses…) think of Customer Service as a discrete, sometimes separate activity that goes on at the call center or on the sales floor. If necessary, it might carry over to the “complaint” department, now renamed, “Customer Service.” 

That view both oversimplifies and “undercomplicates” a more accurate description of an enterprise-wide perspective on the Customer-focused design of a consistently remarkable Customer Experience.

 Think of overall Customer Service involving three areas: Before the Customer engages with the Company, during and after the shopping/purchase engagement, and if needed a “service failure recovery” effort. 

First, what you might call Expectations Management. This includes messages and other communications from the service provider that inform the Client/Customer what to expect. Obviously you want to avoid over-promising / under-delivering. (This is “Gap 4” in the Conceptual Model of Service Quality found in Delivering Quality Service (Zeithaml et al).

 Second is the “real-time” delivery of service — what's done (or not done) at the point(s) of contact(s) and after the sale in terms of follow-up, warranty claims and referrals. These can be evaluated and designed through a Cycle of Service and Moments of Truth (MOT) (touchpoints) analysis. Each MOT can be broken down into a) what the Customer expects; b) what might go wrong (consider a Failure Mode & Effects Analysis [FMEA] here), and c) our brand identity: what this contact should look like to reinforce our brand image.

 Third is contingency planning: What to do if something goes wrong – i.e., “service (failure) recovery.” Probably the best treatment I know of is Knock Your Socks Off Service Recovery by Zemke & Bell. If you haven't seen this one yet, get it!

 So what do Customers expect? Here are some interesting findings from a British Airways study:

 1. Care and Concern – Treat individuals as important people. (Listen to understand their needs, wants and concerns.)

2. Problem Solving – People should be skilled at working their job. (I would add that they should also have the tools, equipment and support they need to do it well at the first contact.)

3. Spontaneity – Are frontline people are authorized to think? When a problem arises that doesn’t fit the procedure book, can the service person use some discretion –– find a way to jockey the system on the Customer’s behalf? (We probably call this being Customer-centric today...)

4. Recovery – If something does go wrong, will someone go out of his / her way to make a special effort to set it right? Does anyone even know how to deliver a simple apology?

 In short, in the words of Pine & Gilmore (The Experience Economy), “Work is theatre and every business a stage.” I would add that Customer Service is the scripted performance art designed in advance to delight and amaze the audience (Customer) with the intended outcome that they 1) rave about the performance and 2) encourage or insist that others come to the show!

 //Richard

Are You "In Control"?

I'm just learning to "trust the tribe" through social media. From my point of view, as well as that of my Clients, the issue is one of control. In traditional "push/interruption" marketing, we were in total control of the output (or at least, that's what we thought...). We controlled the message and the media. We controlled the timing, frequency and intensity. Then we measured our results and adjusted the mix to try to improve the outcomes. Then we SOLD, SOLD, SOLD! Features, Advantages, BENEFITS! Again, we controlled the message and delivery.

How did today’s managers rise to the top? Through exercising control over people, resources and processes to achieve results. Control has been learned and consistently reinforced. It’s internalized and “known.” We all want to “be in control.” In fact, don’t we demean someone who’s “out of control”?

Now, it seems to me, the "new" social/community architecture reverses the locus of control. The implications are clear: You (your brand, your offer) has to be relevant and meaningful to somebody. You have to matter in some way to someone. If you don't, you'll be ignored. If you try to push your message through, you'll be ignored.

In other words, you have to give up control to the tribe (thanks to Seth Godin for the metaphor). Today it’s necessary to be proactively reactive.

To be relevant and meaningful, it's critical to understand in detail and depth your intended user, their life, and the "job" they're trying to do (i.e., be customer-centric). There's an excellent (if somewhat dated now) article "Get Inside the Lives of Your Customers" by Patricia Seybold at Harvard Business Review (I found it on Amazon) that helps describe this process.

It's a new (marketing) world today — one where the community has control and the supplier has to work very hard to tune in and satisfy Customer needs, wants and demands. It’s marketing’s version of the old Trust exercise: “fall back into your partner’s arms — they’ll catch you…” No more "push" — hello "pull."

//Richard Randolph

Florida Customer Service Institute

"Customer" is a Proper Noun

Let's agree right at the top that words have meaning — they communicate ideas and concepts. They can inspire, motivate and stimulate. They frame meaning and context. 

Let's also agree that in today's economically shattered world, Customers matter. Without them (and many businesses today are learning exactly what that means!), we have nothing but walls and inventory. Today, the Customer is king; the Customer rules!

If we agree to these two stipulations, then it makes sense that we communicate the prime importance and critical value of our Customers in all forms of our communication, including our writing.

Recognize a proper noun when you see one. 

Nouns name people, places, and things. Every noun can further be classified as common or proper.

A proper noun is a noun that is the name of a specific individual, place, or object. A proper noun has two distinctive features: 1) it names a specific item, and 2) it begins with a capital letter no matter where it occurs in a sentence.

To me, "Customer" is a proper noun. There's nothing "common" about them! I think it is important, therefore, that the word Customer be capitalized every time it is written. 

When we acknowledge the primacy of our Customers by taking the simple step of capitalizing the name, we signal that this is something important — it's something to be respected and honored. 

Is this just a silly personal pet peeve? Perhaps. Or maybe there is a deeper importance to the question. It is subtle, no doubt, but that does not diminish the significance of this small but large gesture.

I think it can be especially important when we communicate our honor and respect for Customers to our Employees (BTW, Employee is in the same category as Customer — it's a proper noun, too!), they "get it" and will subtly pass that honor and respect along to the most important audience we will ever face: our Customers.

This is why you will see, in all my writings, the word Customer is capitalized as a proper noun. It's a sign of respect in recognition of the irreplaceable value and importance of the real "owners" of the organization.

So let's start a movement! Customer is a proper noun!

//RR

What Consumers Want: Common Threads Pinpointed

Here's some fascinating news recently published on the Science Daily website.

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ScienceDaily (Mar. 5, 2009) — Michigan State University researchers have identified the common desires of today’s sophisticated consumer – a new study that could help businesses become more competitive in the troubled global economy.

Each customer is seeking a “total experience” – whether they’re staying in a hotel, visiting a bank or shopping at a mall – and that experience consists of four major factors, according to the study in the current issue of Cornell Hospitality Quarterly, an academic and industry journal.

The factors, in order of importance, are:

·      Benefit (i.e., what’s in it for me?)

·      Convenience (the ease and availability of the experience)

·      Price (including both the dollar amount and cost in terms of time – i.e., time is money)

·      Environment (does the shopping environment – online or brick-and-mortar – stimulate, entertain, motivate consumer to buy)

Knowing the threads that make up the experience – and how consumers rank them – can help businesses better allocate resources, said Bonnie Knutson, professor of hospitality business and lead author on the study.

“Before, the belief was, if we can’t define it and measure it, we can’t manage it,” Knutson said. “Well, now we’ve been able to define and measure it.”

“The advantage for the business owner,” she added, “is now that I know what is important to the Customer I can allocate my resources, my strategy and the systems I put in place to enhance that total experience. And that’s your competitive advantage.”

The study was conducted on the hotel industry but cuts across many business sectors, Knutson said. For example, during down economic times a national coffee chain may choose to focus on convenience, the second most important factor. While it may close some free-standing stores to control costs, it may also open kiosks in grocery stores or malls in an effort to offer Customers the convenience they expect, she said.

Consumers’ desire for the total experience does not change in a recession, Knutson added, although they may modify one or more of the factors – such as buying their daily latte from a fast-food restaurant or a convenience store.

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Joining Knutson on the research team were three fellow faculty members from The School of Hospitality Business in MSU’s Eli Broad College of Business: Jeffrey Beck, associate professor, and Jae Min Cha and Seung Hyun Kim, both assistant professors.

Use the Kano Model to Delight Your Customers

On a blog I read regularly, the question was asked, "Is 'Surprise' the only way to drive Customer loyalty?" Here's my response to that timely and provocative question.

“Surprise” can be either good, bad, or neutral – it’s simply the appearance of the unexpected. (That’s why the question in the title is probably more appropriate to the discussion.) It’s rarely a good thing to “surprise” a Customer – especially in today’s economic climate. In general, it’s probably safer and better to be consistent and reliable. Customers today want to know with some certainty what they’re getting into. Being inconsistent (i.e., surprising them) does not signal stability and does not build trust and confidence.

Dr. Noriaki Kano and others published Attractive Quality and Must-Be Quality which outlined the Kano Model. It explains, for the first time, the relationship between physical fulfillment and user satisfaction. (See Diagram)

Kano identifies five distinct categories which affect ultimate user satisfaction. They are:

1.  Must-Be elements – absolutely expected; taken for granted when fulfilled, but which produce dissatisfaction when not fulfilled.

2.  One-Dimensional elements – these result in satisfaction when fulfilled and in dissatisfaction when not fulfilled. These have also been identified as “more is better” or “linear” elements.

3.  Indifferent elements – these result in neither satisfaction nor dissatisfaction, regardless of whether they are fulfilled or not. In other words, the Customer just doesn’t care.

4. Attractive elements – when fulfilled, these provide satisfaction, but when hot fulfilled, are acceptable (or not even noticed). These have been called “Delighters.”

5. Reverse elements – these result in dissatisfaction when fulfilled and satisfaction when not fulfilled.

Strategic Application of the Kano Model

1. Must-Be elements are minimum requirements – the “table stakes” – that any offer must meet to be considered competitive. Strategic implications: As long as the offer meets competitive parity, there’s not much value in improving them. Beyond the entry threshold, Customers are not interested in “better.” 

2. One-Dimensional elements – the strategic aim is to be “slightly better” than the competition in this category. If “more is better,” then Customers will prefer “a little more” than they can get elsewhere. Note that this dimension can also be viewed in the reverse: “Less is better” when it comes to price, for example.

3. Indifferent elements – Don’t bother with these unless they are required by regulation or compliance standards. In the beginning, for example, most people did not want seat belts. They simply didn’t care whether they were present or not. It took legislation (plus a ton of consumer education) to require both installation and use of this important safety feature.

4. Attractive elements – This is the most exciting category for most businesses. Here is where we can find elements that produce joy (delight) and preference (the “surprisingly good”) from our Customers – but there’s no penalty for not including them! So our job is to research our Customers to find one or a few “things they really want but cannot find” and include them in our product or service. This is the primary category which can produce long-term Customer loyalty.

5. Reverse elements produce dissatisfaction when present and satisfaction when not present. One easy illustration is produce in the grocery store when has not been adequately cleaned and prepared for display and sale. Finding debris in the strawberries is clearly a “reverse” element.

It’s worth observing, too, that an attempt to offer an Attractive element that misses the mark can become a Reverse element and produce the opposite reaction than the company intended.

Analysis and Conclusions

This simple yet surprisingly insightful model gives us a clear path to analyze the question, “Can loyalty be created only through “surprisingly” good experiences.”

1.  Meet the competitive standard (plus just a little bit) for Must-Be elements (with a sensitive, clear understanding of your Customers and what they think is “competitive.”

2.  Be “just a little better” than competitors in One-Dimensional (linear) elements. There’s no Customer benefit to be had from trying to be “a lot better” in this category, and there may be a severe cost penalty to you to try to do so.

3.  Ignore Indifferent elements unless they are required by an outside authority.

4.  Invest in research, and (here’s an innovative idea:) Talk With Your Customers!! Find out what they want that they can’t find elsewhere. Take it even one step farther: Watch them actually use your product or service in their own environment. They may not be able to tell you what’s missing, but you might be able to see their frustrations and come up with an elegant solution. Then you have a real Delighter! This is the only category where you might want to try to “surprise” your Customer. But be careful: Be certain that your Delighter actually performs!

5.  Consider a “Failure Modes and Effects Analysis” (FMEA) to anticipate what might go wrong, when and where, and how serious it could be. Take reasonable and prudent steps to avoid inadvertently offering a Reverse element to your Customer.Finally, be sure to look at your business and your offerings from both your own perspective and from your Customer’s point of view — they are different! Just like two diners in a restaurant who sit facing each other have a totally different view of the restaurant, Customers see you through their own (and usually very different) filters.

An easy illustration is the idea of “consistency.” As a business, consistency means “to do things the same way every time.” It means standardization, uniformity, regularity.

But to a Customer, “consistency” means predictability, reliability, certainty — and probably comfort and assurance.

Finally, be sure to look at your business and your offerings from both your own perspective and from your Customer’s point of view — they are different! Just like two diners in a restaurant who sit facing each other have a totally different view of the restaurant, Customers see you through their own (and usually very different) filters.

An easy illustration is the idea of “consistency.” As a business, consistency means “to do things the same way every time.” It means standardization, uniformity, regularity.

But to a Customer, “consistency” means predictability, reliability, certainty — and probably comfort and assurance.