Wednesday, November 4, 2009

NACCM LIVE 2009: KEYNOTE: The Ultimate in Customer Centricity: Chief Customer Officers Describe How Everyone Can Be A Loyalty Leader


Curtis Bingham, Author, The Key to Customer Strategy: The Rise of the Chief Customer Officer, and President, Predictive Consulting Group.


Rudy Vidal (RV), former Chief Customer Officer, InContact

Tammy McLeod, ™ Chief Customer Officer, Arizona Public Service

Bob Olson (BO), Chief Customer Officer, Homestead Technologies, an Intuit Company

Curtis warmed up our thoughts with a story about the hotel. When he arrived, he was greeted with a room upgrade, extra water in his room (because they know he likes that), and taken to his room in a golf cart by a bellman who told him all about the hotel. Upon arriving in his room, the bellman put all of his bags in the right place and offered to get drink, food, or whatever Curtis desired. The bellman clearly loves his job. He also got a big tip.

Then Curtis asked us to imagine if there had a problem with the TV (there hadn't, by the way). Imagine calling for service and being promised service in 5 minutes. After a much longer time, service shows up, a smelly repairman who complains about his job. Imagine how you’d fill out the satisfaction survey IN SPITE after dealing with this imaginary service tech, even after the great experience up front.

The actions of many can be offset by the actions of one.

You can’t afford to be the only champion of customer loyalty. You can't tackle it alone.

How many in the audience have a chief customer officer?

Answer: 1.

What is a Chief Customer Officer?

The CCO uses customer insight to affect corporate & customer strategy and align deliverables to customer values, thereby maximizing customer acquisition, retention, and profitability.

Rudy, what is loyalty?

RV - It has a lot to do with where you’re standing. Loyalty is a commitment to repurchase or recommend a product or a brand that resists normal market pressures. What loyalty is NOT in my mind is getting a customer to have repeat purchases. I can have repeat purchasers for a whole bunch of reasons.

I contend that you cannot buy loyalty. It’s an emotional issue.

TM – A lot of those loyalty programs that require me to use a certain card to get my points, it’s not as fun to be a part of those with all the conditions, etc.

BO – I believe you can get a good sense of customer loyalty and engagment by looking at employee loyalty and engagment. When I walk into a new company, I observe employee engagement. It’s amazing the correlation you find inside and outside the company.

RV – There are metrics that very much support Bob’s view. Engaged employees DOUBLES loyalty. If your employees are not engaged, you have half the loyalty that you could have.

How do you think loyalty is changing?

RV – I think the drivers of loyalty are changing. The morning speaker talked aobut consistency. 20 years ago, consistency was difficult to get. You couldn’t train people well enough. Consistency created emotion in customers. Consistency is easier to obtain now. Computers help make consistency happen. What makes us emotional now is changing.

TM – I agree. We see tremendous changes in the drivers of loyalty. The current economic conditions are causing a lot of this. I see that we’re creating a tremendous increase in distrust. We’re also seeing a “return to local.” Every dollar that’s spend with a locally owned business drives 43 cents back into the community. That’s higher than if you spent money with a nationally owned company.

BO – With the local side, there’s a big push to bring jobs back onshore. I think it’s driven by the customer. It’s been so easy to make money in the past, now you have to earn the money in a different way.

Rudy, how do some of the loyalty programs adapt to an emotional experience?

It’s not easy to do, but it’s easy to understand. The issue is to know your customer. This used to be a product & service economy. Not anymore. It’s an experience economy. People are spending money for experiences. Why? Because products are commoditized. If we’re an experience economy, we shouldn’t be surprised when people just want a lower price for a commoditized product. You have to understand your customer. Frankly nobody cares about your product. If you know your customer, and you can lay out a customer’s experience across your customer, and you know the emotional requirements of your customer, you can provide for those emotional needs. And it’s relatively cheap to do.

AUDIENCE QUESTION – It’s easy to create the emotional experience, how do you maintain that focus?

RV – When I greet you, I need to create delight. That’s not so easy to commoditize. Don’t’worry so much about the process, as much as the emotional results.

BO – Instead of using the word focus, I’d use the word purpose. When you describe the outcomes you want, people will find a way. Who wants a job where you have to follow a big manual that tells you exactly what to do. When you define purpose and outcome, people will surprise you.

AUDIENCE QUESTION – How do you manage them to do that day after day?

RV – It’s a culture issue. If management understands why they get up in the morning, and they were to instill this purpose, this mission, and create an environment where everyone knows why they’re here, they’ll watch out for each other and learn from each other.

The moment you believe a culture is strategic, go back to the drawing board. Culture is all about the FRONT LINE. What does a customer need at the front line? That’s what culture should focus on.

BO – Jack Welch talks about getting tired of saying the same thing over and over, but it’s important. Do you people go home at night knowing what’s important? It’s all the little things you do that make a difference. That’s why culture is tactical, not strategic.

Tammy, how have you helped everyone take ownership for loyalty?

TM – It’s a never ending task. It’s never done. We’re a large, regulated “monopoly,” so our approach is often a little different. We have to publicly go before a commission to change pricing, etc. If our service, satisfaction, loyalty isn’t good, it makes that process much more difficult.

Walking the walk is what I’s all about. Alan mentioned this morning UPS and how they’ve caught up to FEDEX. Part of how they’ve done that is by measuring everything. We measure, too. One thing we measure is satisfaction. My task is to inform my company that we’re all in this together. For instance, if you’re a tech and your shirt is untucked or you show up late, you’ve affected the customer experience.

Let people see their part of the picture. How do they fit into this? Create unlikely allies. Go out and pick an unlikely ally. I picked the person who runs the fleet. Then I went to our legal department and made them customer advocates. Find people that others wouldn’t necessarily expect to talk the customer loyalty.

The next step is to sit down with the other groups and have them discover how they impact the customer.

Our CEO made customer satisfaction a measurement across the board, which has helped our efforts tremendously, but like I said, it’s a job that’s never done.

The message I put out there is that the CFO doesn’t sign your paycheck, it’s the customer! Think about that every time you get your check.

Are there metrics that help drive some of the behavior?

TM -We measure a lot of stuff. Web interactions, calls, etc. We look at those on a weekly basis.

BO – At GoDaddy, I would bring in people from different departments and talk to them about the customers and how the different areas affect them. When you can get different groups and make it so they see the interrelatedness of the outcome, that’s when you get good results. It ultimately starts with defining jobs by outcomes and interdependencies and bringing the face of the customer into the building.

RV – I got a letter from a customer who outlined a horrible experience with an electronics company over a month and a half. We literally could not have done a worse job at pretty much every touchpoint. I started thinking “If customers only understood…” which is the wrong approach.

So what I did was invite this customer to come to NY and tell his story to my managers. We offered to cover expenses and provide a stipend for him. It was a beautiful moment. Management got it. They understood. And for every one of these letters, there are 30 customers who felt like this who DIDN’T write.

It was so compelling, managers actually approached him afterward because they felt compelled to say they were sorry.

For us, it became a tradition. We started inviting dissatisfied customers to come visit.

AUDIENCE COMMENT – As we recruit, it’s essential to make sure we know exactly the kind of person to hire.

BO – We all know that chapter one of the book is always “Hire the right people,” but we rarely do it, or share best practices.

RV – There are places where profiling is a good thing! There are different attudes required for different roles.

AUDIENCE QUESTION – Which types of incentives are the best drivers?

BO – For most people it’s not money, it’s recognition. We throw money at it, but nobody’s thought of how detrimental that can be.

TM – We’ve been advocates of Gallup’s Q12 from First Break All The Rules. One of the questions is about getting feedback every seven days. After you get to know your people, you figure out how they like to get that feedback. Have those interactions weekly. Commuication is undrrated and it shouldn’t be.

We have found it highly motivating to set people up in their homes to work if they meet a certain level of performance.

RV – How many of you would like to receive a gift from somebody who doesn’t mean it as opposed to from someone who does mean it. It is key that the employees understand that you mean it. The acknowledgement, the emotional, the human reward has to happen before the currency reward (points, cash, product, etc.). If you do the currency first, they will tend to think they got something for doing something, If you do the human recognition first, you get the attitude you’re looking for.

How do you sell loyalty to the C-Suite?

BO – At the C-level, we’ve been looking for the “diet” approach instead of the “lifestyle” approach. How do you balance short term with long term? CEOs are trying to do the right thing, but it doesn’t always match up with the right need.

It starts with building trust, good debate, and unfiltered freeflowing communication from the customers and the employees.

You also can’t be afraid to lose your job. You’re going to be respectful, but it’s going to be painful for them to hear. You’re going to thell them things they don’t necessisarily want to hear.

AUDIENCE QUESTION – How do you sell it as a strategic initiative when it’s one of the “soft” numbers that easily gets cut first?

TM – By having measurements, I can tweak the service model to see where we can make cuts without losing too much service level.

RV – Have KPIs that are leading to results. If you have actionable KPIs that lead to results, they very rarely want to cut that.

BO – All companies have a brain, heart, and soul. You can’t just focus on the brain.

At the conclusion of the session, the audience shared it's most valuable takeaways:

  • Support local establishments
  • Find unlikely allies
  • Have dissatisfied customers talk to management
  • Understand what emotions I want to drive, rather than what process to follow
  • You cannot separate employee engagement and customer loyalty
  • Make it everyone’s job

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