2019 Retail Trends

Richard Shapiro

If we don’t look ahead we risk being left in the dust, and perhaps nowhere is that risk greater than with the emergence of Artificial Intelligence (AI) as a practical retail technology. AI has left the lab, and although its long-range impacts and unexpected consequences remain the domain of science fiction writers, brands and retailers have seized upon it to predict individual consumer behavior and laser-target their messaging. Those who begin coupling AI with the human touch in the year to come will have a huge advantage long-term. As my 2019 trends that follow demonstrate, the technology gold rush will go unabated but savvy retailers will never lose focus on people.

Specialty Stores Thrive; Department Stores Surrender

Department stores have become damaged through perpetual deep discounting and their failures to motivate staff and excite consumers. All around us, once-dominant chains are shrinking and shuttering at a frightening pace, with venerable Sears and Toys R Us among the casualties. At the same time, specialty shops offering unique merchandise, highly trained (and well-compensated) sales associates, and irresistible services and spaces are booming. No retailer better exemplifies the trend—or its staying power—than Mitchells, a “luxury brands specialty store” that’s set the bar with its exceptional customer service; exquisite designer clothing, jewelry and accessories; and multi-generational relationships with designers and consumers. Jack Mitchell, CEO of the company his parents started in Westport, Connecticut, went on to write Hug Your Customers and, later, Hug Your People—titles that concisely sum up his retail recipe for success in a world of unlimited choice.

Consumers Spend As Channels Blend

Today’s customer is channel agnostic, switching effortlessly between online and bricks-and-mortar buying and employing a blend of shopping techniques: patronizing physical stores for tactile and social experiences, conducting product/pricing research via smartphone, and taking advantage of super-convenient online ordering and delivery options. “We don’t hear customers talk about channels very much,” James Nordstrom, president ofNordstrom Stores, told Diginomica. “Customers value experiences, and so the more successful we are in creating a great shopping experience, no matter how they’re choosing to shop, I think the better our business will be.” To exploit the trend, make your customer’s experience a good one no matter where he shops you.

The Circular Economy Expands, Retailers Go Sustainable, and Customers Approve

Serving the goal of sustainability, a circular economy is a regenerative human-managed system in which waste is minimized by slowing or closing energy and material loops. The economic model embraces durability, reuse, repurposing, refurbishing, recycling, and upcycling, and is being embraced by a growing cohort of environmentally-friendly merchants and manufacturers. Companies such as Unilever, Patagonia, IKEA, Lush Cosmetics, and New Belgium Brewing not only have the distinction of executives who can sleep at night, but legions of loyal, educated and affluent customers who reward environmental leadership at the cash register and like to tell their friends about it. Take Patagonia, the cultish outdoor clothing chain that has championed Earth-friendly practices and policies for over 30 years. The retailer’s Worn Wear program provides generous merchandise credits for returned Patagonia clothing in good condition. The returns are sorted into three categories: “Rewear” for clothes suitable for second-hand sale; “Reuse” for well-worn items to be turned into other products; and “Recycle,” which converts everything else to textile fibers and industrial products such as insulation. According to CEO Rose Marcario, Patagonia “wants everyone to become radical environmentalists by keeping our stuff in use longer.” Retailers with their eyes open won’t need a degree in climate science to know which way the wind blows.

Members-Only E-Commerce Becomes More Personalized

Amazon is far from the only retailer that’s innovating in e-commerce. Walmart describes Jetblack—a service launched from the retail giant’s tech incubator “Store No. 8” (not really a store) earlier this year—as “a new shopping service that combines the convenience of e-commerce with the customized attention of a personal assistant.” More pricey than Amazon Prime ($50 monthly for Jetblack vs. $12.99/mo. for Prime), the service is going after an upscale, busy clientele including “time-strapped urban parents.” A member simply texts her shopping request and Jetblack goes to work, delivering the appropriate merchandise within two business days—just 24 hours for popular items—at no additional charge. The launch publicity stresses an entrepreneurial, team-oriented approach to the question, “What if we doubled down on the customer experience and leveraged emerging technologies to build the most effortless, customized, and curated shopping experience possible?” The underlying system reportedly combines the skill and knowledge of expert human buyers with the speed and precision of AI and aims high to satisfy the unique needs of each member customer. If it flies, and it should, we’ll be hearing a lot more about this and other hyper-personalized services to follow.

Cashier-Less Checkout Expands Rapidly

As Amazon expands its Amazon Go chain of self-service convenience stores, dozens of startups are competing with established firms to master and lead this potentially game-changing retail model. An innovative Chinese entrant, BingoBox, has taken the cashier-less concept to another level, automating virtually every aspect of store operations in more than 300 unmanned outlets. BingoBox stocks snacks, beer, and just about any essential food or household item you might need in a pinch when other stores are closed. Shoppers scan a QR code to gain entry and pay for their purchases via mobile app. Other checkout-free startups include Zippin, with a recently opened concept store in San Francisco, Inokyo in Mountain View, and Santa Clara’s AiFi, which promises an affordable, flexible system for mom-and-pop stores and larger retail operations alike. This is an important trend that many of us will want to watch, but here’s the million-dollar question: Will automation that eliminates human staff find a home across the broad retail spectrum, or be consigned to the convenience store market where today’s innovation is occurring?

Retail Metrics Shift from Store Sales to Various Touch Points

While the same-store sales metric has long served as a baseline indicator of retail success, a number of industry analysts are questioning whether the metric is appropriate to measure modern retailing, according to recent reporting in RetailWire and Retail TouchPoints. Stores don’t always serve the same function that they did in the past, when they had one job—to complete the sale. Today’s stores have taken on a number of new roles, including marketing to boost brand awareness. That may mean the store no longer carries and sells products; that it has become an experiential destination center, showroom, and/or distribution center. Clearly, when sales are frequently completed in a channel other than the store, judging performance based on sales numbers alone is misguided. This is a reality that Wall Street investors and shareholders are learning to accept as retailers convert their stores into something new.

AI Becomes A Valuable Tool to Personalize Service

Retailers are using AI to personalize customer service, and the trend is picking up steam. Fifty-five percent of retailers plan to leverage the technology within three years, according to the 2018 Customer Experience/Unified Commerce Survey from Boston Retail Partners (BRP). Among the many applications: merchandise recommendations based on a customer’s response to a short survey, and the ability to contact a given client at the most favorable time of day. In April, Starbucks rolled out voice recognition ordering in South Korea, extending its mobile order-and-pay technology by integrating with Samsung’s AI chatbot, Bixby. Customers can use their phone in a conversational way—as if speaking with a real-life barista—to learn more about available beverages. Meantime, The North Face has adopted IBM Watson’s cognitive computing technology to help consumers find just the right jacket. But here’s the thing. While AI implementations will permit innovative businesses of all kinds to increase client satisfaction, Starbucks and The North Face know full well—as any customer-centric organization should—that connections made between two people will always trump “equipment” no matter how many bells and whistles are thrown in.

Mall Brands Enter the Subscription Service Rental Market

Ann Taylor and Express are notable among the fashion retailers that offer rental subscription services—an innovation that helps to offset reduced in-store traffic and create a new revenue stream. With Ann Taylor’s Infinite Style program, for $95/month subscribers receive up to nine garments every four weeks. “Wear it. Send it back. Get more. Exchange as many times as you like with free shipping, both ways.” Meantime, Express Style Trial works on a set-of-three basis and looks attractive at a flat monthly cost of $69.95. “This service allows our closet to become your closet. Start closeting items by browsing our site and viewing everything Express Style Trial has to offer. Check out New Arrivals for new styles each week.” In addition to helping clothing retailers maximize their inventories, affordable monthly rental programs such as these hold particular appeal for younger customers who may not have otherwise recognized the brand. Now it’s something they’ll want to talk about. According to Allied Market Research, the online clothing market rental market will exceed $1.8 billion by 2023.

In recent years, retailers have increasingly overlooked employees as their most important competitive differentiator, instead focusing on technology solutions that promise to reduce overhead and automate every conceivable aspect of the business. AI is a remarkable tool with capabilities we’ve only just begun to unleash, but as an executive obsession I fear it will further devalue our people. As enthusiasm for AI, unmanned stores, and ingenious self-service options swells in 2019, remember that when (not if) the machines drop the ball, customers will be most grateful for the human being in the room.

And consider the philosophy of MM.LaFleur as articulated by Rachel Mann, director of offline retail, when she said, “for us it’s all about the human experience—a refuge from Alexa and all of the choice and robots … it should be like you’re meeting your friend and she’s giving you good advice.” Now that’s a trend you can bank on.

B2B Customer Experience: Do This, Not That

Lynn Hunsaker

 

Is business-to-business customer experience management (B2B CXM) a watered-down or a souped-up version of consumer experience management? Does the answer differ when the business you’re selling to is a manufacturer versus a professional services company? Or when your company provides specialized industrial goods, ingredients or components for customers’ products, enterprise software versus desktop software, or business services? All these questions are worth exploring. They’re important questions because customer scenarios differ in each case. Ideally, how you manage customer experience custom-fits your customers’ needs, preferences, and circumstances.

This series of monthly B2B CX articles explores the nuances of business customer experience. The questions above will be addressed in future installments.

Universal to most B2B CXM scenarios is the existence of a “village” of people who influence B2B buying decisions. This single fact means a lot. If the purpose of customer surveys is to accurately monitor customers’ likelihood of rebuying, then you must gain an understanding of each influencer’s expectations and sentiment.

A logical follow-up to this is the need to integrate the viewpoints of the “village” to paint a realistic picture. In consumer situations, there are usually only a couple of viewpoints to integrate for any purchase: husband and wife, parent and child. But for B2B situations, you may be grappling with integrating the views of the user, purchasing agent, plant manager, and gatekeepers for IT, safety, facilities, and quality, among others.

And another commonality among many B2B relationships is extensive post-purchase interaction. This may be related to a complicated deployment such as enterprise software, or peer-to-peer, such as engineers from the supplier and customer companies meeting to work out usage details, or a customer appointee who interfaces with multiple locations of the supplier company in a single morning.

Here are 3 keys to getting B2B customer experience management right: capture the whole buying decision equation, integrate influencers’ inputs to paint an accurate picture, and ensure post-purchase customer experience consistency.

1) Capture the Whole Buying Decision Equation: Why try to tie CX to financials without fully understanding who’s driving what?

DO THIS: Identify all parties within a customer account with the power to kill a buying decision. Characterize each party’s expectations and design your customer-listening portfolio to keep a radar on their sentiment. Quantify the consequences of meeting or missing each party’s expectations.

From the ClearActionBusiness-to-Business Customer Experience Management Benchmarking Study

NOT THAT: Assuming that whoever signs the contract or transacts with your service organization is a spokesperson for their company, or that a series of transactions represents the customer experience that can be reasonably tied to bookings.

2) Integrate Influencers’ Inputs to Paint an Accurate Picture: Simplification of the complex picture is essential for tackling the issues and formulating better strategies to capitalize on opportunities.

DO THIS: Weight and nest the parties’ inputs for more realistic linkages to bookings. Make your customer intelligence reporting compelling: consider show the parties’ interests through flow-charting, cause-and-effect diagramming, activity network diagramming, or interrelationship diagraphs. Make sure action plans reflect inputs from all influencers.

From the ClearActionBusiness-to-Business Customer Experience Management Benchmarking Study

NOT THAT: Assuming that averages and bar charts convey what’s needed to be actionable and effective. Don’t ignore the opportunity to get valuable insights from your dedicated sales team. And don’t let the account teams obscure insights that can help the rest of the company help them.

3) Ensure Post-purchase Customer Experience Consistency: Why work so hard to manage perceptions but ignore these vital touchpoints?

DO THIS: Make it easy to capture informal comments. Then stream informal feedback to relevant groups throughout your company. Establish cadence & methodology for originators to prevent issue recurrence. Motivate actions and follow-through on informal inputs. Set the stage for streamlined re-purchase decisions: share actions and progress to proactively influence rebuying.

From the ClearActionBusiness-to-Business Customer Experience Management BenchmarkingStudy

NOT THAT: Assuming that inconsistencies will naturally work themselves out, or aren’t important to building trust and relationship strength. Waiting to send a survey when you’re already getting a goldmine of insights that you can work on right away to be more proactive in influencing repurchase decisions.

B2B CXM has parallels with consumer experience management, but there are definite realities in B2B CXM that should be addressed in order to make the most of your efforts and investments. Experiment with these 3 B2B “musts”, or better yet, design them into your B2B customer experience management from the beginning. As the graphics above show, you’re likely to stand out from the crowd in your industry in doing so, and these methods may be an important customer experience differentiator for your company.

Note: The concept of "Do This, Not That" is borrowed from the popular book "Eat This, Not That", where the weaknesses of common practices and myths are brought to light and sensible replacements are recommended.

Other articles in this series:

• Business-to-Business Customer Experience: What’s It Like?
• Understanding Business-to-Business Purchase Decisions
• B2B Voice of the Customer: Integrating Decision Influencers’ Views
• Customer Experience ROI Opportunities in B2B Touchpoints
• State of Business-to-Business Customer Experience Management

Customer Experience Planning: Do This, Not That

The annual planning cycle is an opportunity to review pluses and minuses in what’s currently in play, take a look at what’s new, and request resources to take your customer experience performance to the next level in the new year. And it’s more than that: it’s the time when you should step back and assess alignment. Make sure your approaches are aligned with what customers want, and make sure your strategy is aligned with your enterprise objectives. Be courageous to scale back or drop anything that is out of alignment. Be brutally honest in your assessment of what is helping customers help you.

In the spirit of the best-selling eating guide — Eat This, Not That — which spells out popular misconceptions about sensible choices, here are 3 recommendations for your customer experience planning: (1) Drive significant change in order to drive significant ROI, (2) Align methodologies with what customers want, and (3) Expand shared vision for customer experience excellence enterprise-wide and beyond.

1) Drive significant change in order to drive significant ROI: most customer experience efforts start out with a technology buy, taking cues from vendors about what customer experience management entails. In truth, it boils down to making your company irresistible to customers and prospects. That can’t happen by virtue of asking more questions, incenting more purchases, enticing referrals, and other typical customer experience management practices. And it can’t happen one survey respondent at a time, or through one department’s actions at a time. Making your company irresistible to customers and prospects requires significant change. Plan for it in your new year.

DO THIS: put the majority of your effort into cross-functional collaboration that will align processes, policies, and culture with customers’ well-being.

NOT THAT: over-invest in customer listening and engagement when you haven’t yet resolved what customers have told you to fix.

2) Align methodologies with what customers want: ease of doing business, robust solutions, and good all-round value while achieving their business/life needs. It’s ironic that most customer experience management techniques are far removed from this list: they may come across as invasive, remedial, ill-timed, self-serving, or illogical. Nobody thinks when they buy something: I hope I’ll enjoy the survey they send me, or the 800-number call I would prefer to never have to make, or the offers to engage me in downloading stuff and participating in social media with them. Yet, for customer experience professionals, those things are typically what we eat, drink and sleep.

Minimize invasion by making it easy for customers to give you feedback whenever and however they want, and by requesting specific feedback only as often as you make change happen. Minimize remedial, ill-timed, self-serving, and illogical methods by focusing on becoming preferred, not just referred. Preferred companies earn that status through trust-building, doing things right the first time and every time, giving the customer a hand-in-glove feeling of “right fit” for them. Human nature takes the path of least resistance and rewards “right fit”. Plan for it in your new year.

DO THIS: focus on doing things “for” customers to earn their long-term confidence (i.e. do things “to” your company that better serve customers’ well-being).

NOT THAT: over-rely on customer experience management technologies or over-rely on doing things “to” customers (i.e. getting them to do things “for” you).

3) Expand shared vision for customer experience excellence enterprise-wide and beyond: it not only “takes a village”, but also requires upstream prevention of issues for customers and front-line staff — the most awesome customer experiences are hassle-free. And that means every functional area and every managerial level plays a role. Nobody is excused from having a ripple effect on customer experience.

Think of customer experience excellence as a managerial context, just like stewardship of people and resources is a universal managerial context. This outlook alone will get you more mileage than you ever dreamed toward becoming a preferred, irresistible company. Plan for it in your new year.

DO THIS: ask every member of the C-team to specify their contribution to customer experience excellence goals, and weave customer experience insights into everything the company does.

NOT THAT: assume the C-team is fully engaged, relinquish customer experience management to certain people, build silos into the way customer experience is managed, or allow any process or ritual to operate without a customer experience context.

Carpe diem! Seize the day for turning a new leaf in the business results your customer experience management efforts produce. This is not a plug-and-play endeavor. It’s not an assignment that a critical few can pull off. It’s not about manipulation or enticement. Customer experience excellence is a way of life. Embed it in your company through-and-through for maximum profitable growth.

Notes:

1. Customer Experience Strategy is one of the six domains in the body of knowledge advocated by the Customer Experience Professionals Association (CXPA). (ClearAction offers a CXPA officially Authorized Resource & Training CCXP Exam Prep Course.)

2. The concept of “Do This, Not That” is borrowed from the popular book “Eat This, Not That“, where the weaknesses of common practices and myths are brought to light and sensible replacements are recommended.

3. Other articles in this series:

• Customer Experience Governance, Do This, Not That
• B2B Customer Experience: Do This, Not That
• Customer Experience Strategy: Do This, Not That
• Customer-Centered Culture: Do This, Not That
• Voice of the Customer: Do This, Not That
• Customer Journey Maps: Do This, Not That

https://goo.gl/eZwnjc

Customer-Centered Culture: Do This, Not That

Customer-centricity means so many things to different people, but to customers it means one thing: having their best interests as your top priority. Let’s face it: whatever your heart is centered on is where you’ll most likely excel. We see it again and again with marriages, children, hobbies, and bosses — when your efforts are centered around any of those interests, your outputs will probably be rewarded accordingly.

A customer-centered culture is not “driven” by customers to exclude the interests of employees or shareholders/investors. If you think about it, customers don’t want your employees or your company to be unsuccessful. But to maximize your success, you need to optimize (i.e. balance) everyone’s interests, with the lifeblood of everyone’s compensation as your guiding light. The lifeblood of paychecks, dividends, and budgets is not revenue per se — that’s a by-product — rather, the lifeblood is this: addressing customers’ needs better than anyone/anything else is addressing them.

To be clear about customers’ needs, it pays to keep in mind that customers buy from you in order to enable a capability they’re seeking: peace of mind, enjoyment, pain avoidance, growth, life itself, and/or to serve their stakeholders’ needs. These needs, from a customer-centered perspective, are called “customers’ jobs-to-be-done“.

Regardless of industry awards for best customer satisfaction, or managements’ conviction that customer-centered culture is already strong, it’s always best to check with your customers about their view: do they feel that you have their best interests as your top priority? Study after study shows a mis-match between customers’ and management’s perspective of customer-centered maturity. For example, the CMO Council found that 56% of managers felt their companies were highly customer-centric, while their customers viewed only 12% of these companies as highly-customer-centric.

This mis-match in perspectives is rooted in the definition of your business’ purpose (the lifeblood or its by-product), what you’re supposed to be doing to meet that purpose (as described above), and how you’re guiding executives and employees to achieve it. The mis-match is short-changing everyone: customers, employees, and shareholders/investors. To maximize your company’s lifeblood and its necessary by-product, it’s necessary to center your culture on customers.

Here are 3 keys to getting it right: set yourself up for success, nurture mindsets, and encourage behaviors for customer-centered excellence.

1) Setup for Success: “Culture” is an organization’s way of thinking and doing. Straightforward assessment of mindsets and behaviors is the essential starting point — and ongoing reality-check — for becoming what your customers need you to be.

DO THIS: Get objective assessments of executives’ and employees’ customer-centered thinking and doing, early and often. Not just customer-facing folks, but everyone behind the scenes and your alliance partners, suppliers, etc. Create ashared vision that’s based on customers’ views. Set expectations for broad engagement in actions and closing the loop with customers. Draft a roadmap that injects customer-centered decisions and actions into everything the company does.

NOT THAT: Expediting issues for top customers is not a good measure of being customer-centered. Neither is a feeling of being close to your customers because of physical proximity or frequency or intensity of interactions. Why? Because it’s typically too little, too late, and because everyone in your company has a ripple effect on customers’ jobs-to-be-done. Being reactive is costly. Being proactive is efficient. Being systemic and holistic is the key to being effective.

2) Nurture Customer-Centered Mindsets: It’s easy to assume that everyone knows what they need to about what’s important to customers. Perhaps your employees use your products and services in their households, or maybe your executives have worked in the industry for decades. In any case, your “sample size” of inputs about customers’ needs is likely too small, and/or your company-wide shared vision of what it means to be customer-centered is probably limited, fractured, or even outdated.

DO THIS: Share customers’ feedback, suggestions, and stories broadly and frequently. Use customer experience excellence characteristics as criteria for hiring, promoting, onboarding, and training employees at all levels and in all functional areas. Establish a commitment-making process and consequences (positive and negative). Coordinate managers of various customer experience efforts (e.g. CRM, VoC, references, retention, acquisition, service, design, messaging, etc.).

NOT THAT: While the attentiveness and friendliness of front-line employees and other customer touch-points are necessary, they’re insufficient. A chain is only as strong as its weakest link, and customer-facing employees and technologies are at the end of a long line of links that permeate everyone inside your company, as well as those you depend upon externally to enable customers’ jobs-to-be-done. The interdependence of people, processes, and technologies is real. The interdependence of layers within each of these 3 components is always in motion.

3) Encourage Customer-Centered Behaviors: To influence the outcomes ‘re seeking, start at what creates those outcomes: behaviors of employees at all levels and in all functional areas. Mindsets and behaviors are in a perpetual reinforcement loop that results in the reality your customers experience.

DO THIS: Reward teamwork that exemplifies your vision of what it means to be customer-centered. Keeping interdependence in mind, prevent silos of information and efforts, and use customer experience inputs to guide strategies, operating plans, policies, processes, and day-to-day work. Incent leaders and laggards across your company to learn collectively, moving your whole company to stronger maturity in being customer-centered as your customers define it.

NOT THAT: Recognition and bonus criteria that are focused on customers’ behavior, instead of employees’ behavior, is problematic. Recognition and financial incentives that focus on individual employees, instead of teams, also short-changes what it takes to be a customer-centered company.

A sensible approach to customer-centricity is what’ needed for sustained customer experience business results. In fact, companies that optimize (i.e. balance) the interests of investors, employees, and customers — keeping an eye on customers’ jobs-to-be-done as a guiding light — have proven superior financial health, growth, and raving fans, as described in the book Firms of Endearment. For long-lasting customer experience ROI, set yourself up for success, nurture mindsets, and encourage behaviors that build customer-centered excellence.

Notes:

1. Customer Centric Culture is one of the six domains in the body of knowledge advocated by the Customer Experience Professionals Association (CXPA).
2. The concept of “Do This, Not That” is borrowed from the popular book “Eat This, Not That“, where the weaknesses of common practices and myths are brought to light and sensible replacements are recommended.
3. Other articles in this series:
   • Customer Experience Strategy: Do This, Not That
   • Voice of the Customer: Do This, Not That
   • Customer Journey Maps: Do This, Not That

Voice of the Customer: Do This, Not That

Voice-of-the-customer (VoC) is often the start and focus of customer experience management, as well it should be in several respects. It’s about paying attention to “the hand that feeds you”. But stop to think about the customer experience return on investment (CX ROI) implications of this emphasis:

1. 1. By starting your customer experience management (CXM) with VoC, you’re probably side-stepping the all-important foundation of CX strategy and customer-centered culture. Ask any VoC manager what their biggest concern is after a few years of conducting surveys and most will tell you that gaps in strategy and culture plague their progress.
   2. By focusing CXM on VoC you’re likely to be so busy updating/selecting samples, driving response rates, poring over data, and packaging graphs and presentations that most of the other internal engagement efforts needed to fix broken things get short shrift. Ask any customer who’s participated in surveys what their biggest concern is, and most will tell you they feel like not much changes for the good after they generously share feedback.

These weaknesses in VoC are evidenced in Temkin Group’s 2013 State of VoC Programs study:

1. 1. • 7% of companies are VoC novices, in the very early stages of VoC development.
      • 37% are VoC collectors, focusing on listening post selection, which questions to ask, and which metrics to use.
      • 37% are VoC analyzers, spending the majority of their time finding insights from VoC data.
      • 16% are VoC collaborators, tailoring customer feedback to stakeholders who are engaged in continuous improvement.
      • 4% are VoC transformers, linking customer insights to operational data and processes, as well as strategic planning throughout the company.

With statistics like that, it’s no wonder that executives are frustrated about CX ROI. How many other business efforts are allowed to stay in the non-transformation phase year-in and year-out? VoC is not an end in itself. It’s a means to an end.

Here are 3 keys to getting it right: respect existing customer feedback, understand the whole customer experience, and align VoC to customers’ preferences.

1) Respect Existing Customer Feedback: Remember the purpose of CXM is to build strong relationships that yield better results for the company and for customers.

DO THIS: Collect customer comments from your front-line employees, CRM, service call and sales call reports, complaint logs, social and other sources. Historically, comments were unwieldy, but now we have technologies that help consolidate, sort, prioritize, and deliver relevancy. Like any human-to-human relationship, let’s respect what customers have already told us before asking them to say it again.

NOT THAT: Surveys are often “jumped into” because “everybody’s doing it”. If you want to stand out from your competitors, think carefully about what’s best for your customers and for your unique culture. Scores and indexes are typically over-emphasized to the exclusion of reading, studying, and acting on customers’ comments. Is that what you’d do in any other type of relationship in your life or business?

2) Understand the Whole Customer Experience: The whole experience is whatever the customer defines it as — and typically has an earlier starting point, a later ending point, and more behind-the-scenes efforts by customers than managers tend to define it.

DO THIS: Allow customers to give you feedback about their experience, and their world. Make sure you’re understanding their challenges and journey before any touch-point occurs, as well as post-purchase, and behind-the-scenes among their decision-makers. What does your product/service get combined with in the customers’ use, and what implications does that have for customers? These are essential sources for performance improvement and innovation ideas, if you’re aiming to differentiate customer experience and improve business results.

NOT THAT: Resist the temptation to copy someone else’s survey questions, design surveys as a means to determine departments’ bonuses, or enable your survey to support your planned public relations and marketing claims. What a waste of everyone’s time and investment. Don’t confuse your world with the customer’s world. When you ask customers to rate you, that’s not necessarily indicative of how well their needs were met. And when they answer in terms of their world, you not only gain context that illuminates their expectations, you also increase the likelihood of higher response rates. Everyone likes to talk about themselves. Let them.

3) Align VoC to Customers’ Preferences: Allow customers to provide you feedback when, where, how, and on what they prefer. After all, VoC is intended to improve — not detract from — customer experience.

DO THIS: Find out what feels most comfortable for customers, and what draws them out to gladly share their world with you. Build-in some flexibility to adapt your methodology over time. Or be willing to abandon non-customer-friendly methods when you discover what works best for customers’ experience. Only ask for more feedback as quickly as you can act on what you already have, or when things may have changed. Enable customers to volunteer feedback anytime, any place, and put processes in place to capture it and channel it to departments in your company (or your external partners) with emphasis on acting on it.

NOT THAT: Resist the inclination to stick with a methodology purely for internal reasons. While ratings continuity is desirable, what’s the point when the very thing you’re aiming to improve is hindered in the VoC process? New technologies make it easier now to customize questions, allow substantial comments, and translate customers’ world context to actionable information in your world. Get out of the old-school rut of stock-piling or vaporizing customer feedback in your CRM, contact center, and other sources; the originators of those problems, wherever they may be, need to receive that customer feedback and be held accountable to prevent recurrence.

A sensible approach to voice-of-the-customer is what’s needed for sustained customer experience business results. Make VoC the central focus for CXM — and for everything the company does! To do this, make sure your CXM resourcing enables facilitation of strategy, culture, employee engagement in continuous improvement, and everything else that’s needed to respond to and build upon inputs from “the hand that feeds you”. For long-lasting customer experience ROI, respect existing customer feedback, understand the whole customer experience, and align VoC with customers’ preferences.

Notes:

1. “VoC, Customer Insight & Understanding” is one of the six domains in the body of knowledgeadvocated by the Customer Experience Professionals Association (CXPA).
2. The concept of “Do This, Not That” is borrowed from the popular book “Eat This, Not That“, where the weaknesses of common practices and myths are brought to light and sensible replacements are recommended.
3. Other articles in this series:
   • Customer Experience Strategy: Do This, Not That
   • Customer-Centered Culture: Do This, Not That
   • Customer Journey Maps: Do This, Not That

Effective Listening to Voice of Customer (VoC)

Once you have established that customer service is paramount to successfully running your service business, the obvious next step is to devise systems and procedures that can help you effectively learn, combat and manage customer grievances and any shortfalls in service levels from customer expectations.

This is a complex process, though not overly so, and can be succinctly summarised in the following points:

Being concerned

The very first step is to view each customer as a potential detractor, and thus being concerned about any untoward reviews from them. Studies have shown that a single negative review can offset 12 positive reviews. This puts an ever greater pressure on management and support staff to be actively involved with each and every customer, so that no customer leaves disgruntled. The caveat here is that being concerned alone won’t solve the problem, unless supplemented with the following actions.

Installing effective feedback tools

An effective listening to voice of customers would work only when effective tools to collect feedback are in place. While the definition of ‘efficiency’ in the context of feedback collection tools may be subjective, there are three things that any feedback collection mechanism must provide for it to be deemed worthy of consideration:

• Ability to capture vast amount of data – Only an innovative and unconventional feedback collection method will excite customers to leave their feedback.
• Ability to manage all collected data – A massive amount of data is meaningless if not stored in a format conducive to drawing business insights and trends of customer behaviour.

Ability to allow immediate addressal of customer grievances

As important as it is to store and record trends of customer behaviour, it is equally essential to solve service-related issues that customers may have, while they are still on-premises as this can eliminate the possibility of a customer venting their dissatisfaction online. A study has gone so far as to report that 82% of customers say that the most important factor leading to a great customer experience is having their issues resolved quickly.

Given that a manager’s focus is on effectively listening to his customers, a logical conclusion would be the installation of a strong and reliable feedback collection procedure.

Understanding your customers and their complaints

This is basically a continuation of the definition of an effective feedback collection system, but merits a separate mention. Immediate addressal of customer complaints becomes feasible only with a thorough knowledge of what the exact issue is and where the grievance has arisen from. Gaps in service quality can be plugged in only with an in-depth understanding of why and how the lapse in service occurred in the first place. Complete data capturing of customers can help in a more robust loyalty module allowing personalized service to regular patrons.

This points to the development of a process that naturally tends towards a “systematic listening” and address of customer grievances.

Empowering customer-concerned employees

With the installation of a sound feedback collection system, comes the added responsibility of delegating responsibilities appropriately to the front-line, customer facing staff members. Doing so will ensure that all customer grievances are handled in a timely and accurate fashion.

An effective feedback collection tool, should, therefore, provide a means for assigning tasks to staff members, particularly the customer-centric staff. It would be even better if this mechanism could work in real-time, thereby resolving customer complaints quickly and ensuring cent per cent customer satisfaction.

Overall monitoring of customer’s behaviour

With on-premise resolution of customer grievances taken care of, the real value of a customer feedback system can be extracted from its ability to track trends in customer satisfaction and behaviour over time.

Customers rate a business over several parameters – pricing, service quality, attitude of staff while interacting with customers to name a few. Their overall satisfaction of interacting with the business will then, not be limited to just the quality of service provided but will depend on a delicate balance of these parameters, based on what weight they assign to each of them. An important thing to note is that these preferences may change over time and vary across customer segments. In an effort to keep all customers equally satisfied over time, these changes must be carefully measured and appropriate actions taken.

An effective feedback system will allow business managers to understand their customers changing preferences and make business decisions in accordance with those changes. This will truly include the customer’s voice in implementing business strategies.

Getting involved personally

Last but certainly not the least, nothing makes a customer’s day more than the pleasure of having his issue resolved instantly, and that too with the knowledge that their servers took a “personal” interest in their service. Establishing a personal connection with customers is becoming a vitally important aspect of service-oriented businesses.

Therefore, merely assigning customer complaints to staff members may no longer help the business acquire and retain customers, but taking a “personal” interest in the resolution of their customer’s issues will. Since this personal connection will help the customers achieve a sense of belongingness with the business and there will then be a higher likelihood of them returning again and again.

An effective methodology to listen to customer’s voice, then, remains incomplete without a mechanism to getting involved personally with the customers.

Managing a business that does not sell tangible goods but intangible service can be tricky, but a task that can be accomplished if the basics are done right – listen to what the customers are saying, respond effectively and analyse their feedback to make sure things don’t go wrong again.

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3 Ways Customer Listening Powers Marketing Effectiveness

Ernan Roman

Today customers can make sure that their voice is heard like never before. And, if marketers don’t have measures in place to listen, they are turning a deaf ear to potentially significant problems and missing out on essential insights for improving their customer experience.

Following are 3 ways to leverage customer listening and examples of how companies are putting these strategies into action.

1. Realize that Customer Listening (and Responding) is a 360-Degree Commitment.

Engagement with customers includes business partners who are also the face of your brand. So, how every aspect of your brand listens to the voice of your customer and responds is key.

For example, NASCAR made the decision to revamp its marketing and listening in five key areas. But that’s not where it ended. NASCAR also encouraged its business partners and drivers to do the same.

“We developed an industry action plan,” stated Steve Phelps NASCAR CMO, “… A plan for digital and social, a plan for driver star power–and within each plan, [we came up with] a number of different action items … [In an] effort to be thought leaders who provide the best available experience to our fans. We strongly encourage those across the entire landscape of the sport to embrace digital and social media — from drivers and teams to tracks and corporate partners.”

2. Customers are More Than Numbers, They are People, Talk to Them … (And listen.) 
Data gives you a good view of what customers are doing. However, it is not going to tell you why or give you theemotional factors like a conversation. Personal interactions can be more valuable than all the big data you will ever collect. 

Starting in October, Flow and Columbus Business Solutions, a telecommunications company serving the Caribbean, asked customers to tell them how they felt. Michele English, Columbus’ executive vice president and chief customer officer noted, “Our plan is to significantly enhance our customer ‘listening’ systems and ensure that feedback is integrated into our daily decisions and connected to our customers’ experiences across the organization… we have to design and implement [operational processes] to ensure that every customer touch point in the organization can support our customers’ needs efficiently and effectively… We now look forward to more customer feedback. “ 

The Company designed an easy to use online customer survey and sent communications to customers to encourage them to complete the survey and tell the company what matters. 

3. Make Conversation (and Listening) Easy with Social Communities 
Online communities enable the exchange of ideas in discussion forums, polls and social media. They provide brand information, mitigate problems and provide opportunities for a collaborative two-way conversation.

Southwest Airlines launched a Listening Center to monitor its online communities using a keyword-based listening tool that pulls in mentions from social platforms. The Listening Center monitors insights in real time to quickly identify issues and immediate engagement opportunities. Customers can connect their Twitter handles to their Rapid Rewards frequent flier numbers to get personalized services. Southwest Airlines also leverages the Listening Centers to send apology letters for delays, find new opportunities for engagement and implement company-wide customer care. 

Alice Wilson, social business advisor for Southwest’s marketing organization notes that sharing the information collected is the key to listening success. “The customer feedback means something different to each [department] and can inform each group in a different way…From a social care standpoint, [employees] want to help assist and resolve. But somebody from the marketing team may be looking at that [data and ask], how do we alter communications to help these future situations?…The point is not to keep it as a silo.”

Keys to Effectively Listening to the Voice of Your Customer:

• Listening should be at the heart of your marketing strategy.
  Listening lets you understand the “why” of what your customers are doing and experiencing so that operational issues, communication, and experience can be overhauled for a more positive overall brand impression.
• Learnings from Listening Needs to be Shared with Every Part of your Business.
  Having data without acting on the implications does nothing for your business. Set standards for how the insights from your listening programs are regularly integrated and shared with all departments so that changes and actions are put in motion to respond to customer needs and comments.
• Meaningful Dialogue Based on Listening.
  Develop authentic, honest and direct conversations based on listening, which lead to meaningful connections and two-way dialogue.
• Use Listening to Develop Strategies.
  Once you launch programs to listen, develop means for incorporating these learnings into new strategies that address the issues identified in customer conversations. Put in motion ongoing review of the data collected through listening programs so that you have a clear roadmap that delineates what customers are expecting, their pain points and their current/future demands.
• Listening Objectives Must be Established.
  If you don’t know how you are going to listen, you will not be able to hear what your customers are trying to tell you. Whether you have the means to set up a full scale listening center, a social monitoring program, a survey, or a call center monitoring program, know what you are implementing and how you will regularly harvest and utilize the insights.

In summary, customers have a lot to say and they want you to listen. The good news is that customers generally have valid concerns and smart advice to offer. Marketers and customers will both benefit if the marketer creates multichannel ways of listening to customers and processes for acting quickly on their input.