Can Big Be Beautiful?

When it comes to delivering a truly differentiated customer experience, small companies have a distinct edge. In a small business environment where a handful of employees personally serve every customer, know every product or service, and have the authority and responsibility to do the right thing, delivering a unique and personalized customer experience comes naturally.

As companies get larger, however, they often lose that personalized touch. Being big does not preclude the creation of great experiences; it only means that they just have to work a little harder to achieve and maintain it.

Smaller companies have a distinct advantage when it comes to customer experience management. Their very survival depends on managing each and every customer relationship; therefore a customer-centric mindset comes naturally. They are not unencumbered by politics or corporate policies that can get in the way of delivering great customer service. In addition, a handful of employees know every customer and every aspect of the business, which makes them nearly omnipotent when it comes to serving customers. Clearly, sometimes small is truly beautiful when it comes to delivering a great customer experience.

Does that mean that larger companies have no chance of cashing in on customer experience management? Not necessarily; big businesses can overcome many of the barriers that are presented by size and scale. In fact, some large companies have relied on a customer experience differentiation to rise to the very top of their industry.

Being big isn’t always easy. As companies grow, they add channels, markets, products, employees, and thousands of other touch points. They may also add new layers of hierarchy in an attempt to manage new offerings. Each addition can contribute to the exponential growth in the overall complexity of the customer experience. As a result, large corporations can begin to lose touch with their customer’s needs and expectations.

However, being big doesn’t preclude companies from being a leader in customer satisfaction.

Consider the most recent results of the American Customer Satisfaction Index (ACSI) for the Internet Retail industry. The overall king of customer satisfaction in this group is none other that the largest company in the sector - Amazon.com:

Internet Retail
American Customer Satisfaction Index - 2008
Scaled of 1-100, 100 being the best

ACSI Score by Company (Scale=1-100)

• 88 Amazon.com, Inc.
• 87 Newegg Inc.
• 84 Netflix, Inc.
• 83 Internet Retail Average
• 81 eBay Inc.
• 80 Overstock.com, Inc.

Source: American Customer Satisfaction Index. Retrieved from www.theacsi.org on February 12, 2009.

Indeed, big can be beautiful as demonstrated by Amazon.com. Amazon is the oft-mentioned benchmark for customer personalization. Their focus on customer experience has been well documented and discussed. They have utilized technology to provide personalization on a broad scale to provide each and every customer with a sense of familiarity and insight. By leading in customer satisfaction, they are on track to exceed $19B in Net Sales for 2008 according to available 2008 quarterly earnings reports.

Amazon has avoided many complexities that plague other large businesses. They predominantly operate within the on-line channel, which reduces the number of physical locations or markets that they must coordinate. As a fairly young company, they have yet to experience the bureaucracy and paralyzing politics that can build up over decades of growth. And the company still embodies the spirit and vision of its founder, Jeff Bezos, who still runs the company.

Companies like Amazon are proof that large businesses in any industry can indeed compete with a differentiated customer experience. If businesses can overcome the complexities that are presented by size and scale, they can excel at customer satisfaction. By doing so, big can indeed be beautiful.

The Right Way to Measure Your Customer Experience

Attempting to measure the customer experience with a single metric such as customer satisfaction or customer advocacy is overly simplistic and risky. Instead, companies should dig deeper and establish a portfolio of measures that can determine how each touch point contributes to the overall experience.

The Total Customer Experience is Greater Than the Sum of Its Parts

The customer experience is a complex process that can consist of multiple touch points; a process that can be broad, long-running, span multiple channels, and can be influenced by any combination of internal and external factors. Effectively measuring the total customer experience requires a more acute understanding of its individual parts.

The customer experience process does not begin and end at a store, sales representatives, web site or call center. It extends from the moment the customer becomes aware of your company and is comprised of multiple independent interactions, transactions, and contacts along the way.

Each customer experience is made up of any number of touch points and customer encounters, each of which should be measured independently to determine their contribution to the overall experience. An issue encountered at any one of these points can dramatically influence the overall experience.

For example, the quality of an automobile is an aggregate measurement of the quality of the individual parts combined with the integrity of the overall design and assembly process. If any one part fails to perform properly, the overall perception of quality is diminished. Likewise, even if every part is perfectly manufactured but isn’t arranged or assembled in a useable manner – the perception of quality will suffer. Only when quality manufacturing is guided by quality design will the experience truly be maximized.

Although overarching metrics such as customer satisfaction and customer advocacy are quickly becoming standard metrics in today’s companies, attempting to measure the customer experience with a single metric can be overly simplistic and risky. Effectively managing the customer experience requires effective measurement and management of a portfolio of metrics that will provide insights into what is - or is not - working.

Identify Your Touch Points

The customer experience is a collection of touch points encountered by the customer that includes the attraction, interaction, and cultivation of customer relationships. Touch points may include advertisements or promotions, online and in-store shopping experiences, transaction and bill processing, and post-purchase delivery, usage, and support.

The total number of touch points that the customer encounters goes well beyond the point of sale. Establishing an accurate inventory of all of your company’s touch points – both intentional and unintentional - can mean the difference between success and failure.

Defining when and where the customer experience begins and ends is perhaps the most difficult task facing any business. Too often, companies define the lifecycle and customer touch points too narrowly, leaving critical elements of the customer experience to chance.

A touch point is defined as any customer interaction or encounter that can influence the customer’s perception of your product, service, or brand. A touch point can be intentional (an advertisement) or unintentional (an unsolicited customer referral). In this era of broad customer skepticism, the unintentional touch points often matter the most. Which would you trust more: a company’s ad pitch or your best friend’s personal referral for a product? Both are touch points, but one carries much more value than the other.

When your business interacts with a customer, it’s often easy to overlook what is really going on; you are touching them in many, perhaps subtle, ways. When it comes to customer experience management, the right touch can make all the difference. To do it right, you must first identify all of your potential touch points and then work to measure and optimize each one.

Measure Individual Touch Point Effectiveness

Each customer touch point is typically designed for a specific operational purpose. An advertising touch point may be designed to build brand awareness or to identify prospects. A point of sale touch point may be designed to execute transactions. A call center touch point is designed to resolve customer issues. Each touch point is unique and contributes to the overall customer experience in different ways.

Effectively measuring each touch point requires a holistic approach to understand the contribution to both operational and customer relationship objectives. For example, the operational side of an advertising touch point may be measured in terms of a conversion rate. The customer relationship side of the same touch point may be intended to influence the customer’s perception or awareness of the company’s brand.

Measuring the effectiveness of each touch point should balance both operational and customer experience objectives. Operational metrics are typically easily identified, while customer relationship metrics can be elusive. Ideally, timely and recurring customer feedback is collected and compared to operational results to provide a more complete picture. In doing so, companies can obtain a better understanding of how each individual touch point is contributing to the overall experience.

For example, let’s say a business establishes a goal to achieve a 5% click-through-rate (CTR) with their pay-per-click campaign. If the actual campaign achieves 100% of that goal, they might consider it a success. However, customer perceptions might not be so rosy if the ad promised a product, promotion, or discount that isn’t readily available or is difficult to obtain. As a result of customer confusion and aggravation, the company may achieve only 50% of their revenue goals for the campaign.

Measure the Overall Customer Experience

In order to effectively measure the overall customer experience, companies must accurately measure the contribution of each individual touch point as well as the overall level of customer satisfaction and advocacy. At times, the results of one touch point may have an unanticipated affect on other aspects of the experience.

Consider how the individual touch points associated with a fictitious product launch might impact the experience at an electronics store:

1. Product Innovation: A key manufacturer is developing a leading-edge product that will be innovative in the marketplace. The media learns of these developments and publishes reports that an amazing new product is coming soon. Consumer excitement and anticipation is driven to extremely high levels, although actual ship dates remain unknown. (Score: 10/10)
2. Electronics Store: Employees at the store and call center are inundated with inquiries about the pending new product but are unable to provide any additional information regarding availability nor can they accept pre-orders. (Score: 3/10)
3. Marketing: The product launch date is set and marketing begins to actively promote the new product and its innovative features. Consumer anticipation is again driven to new highs as the launch date approaches. (Score: 10/10)
4. Product Purchase: On launch day, consumers flood the store and web site to get the new product. Those customers that are fortunate enough to purchase one are extremely satisfied. (Score: 10/10)
5. Out of Stock: Initial euphoria quickly turns sour as the store runs out of stock and thousands of customers are turned away without one of the highly coveted and heavily promoted products. Customers are told to check back again in a few weeks. (Score: 1/10)

For a handful of customers who were able to purchase the product, they are extremely satisfied with their experience and are willing to tell all of their friends about their latest purchase. Conversely, however, many other customers who were turned away empty-handed are now frustrated and highly dissatisfied with the experience.

Relying solely on customer satisfaction or customer advocacy measures may not illuminate how each touch point contributed to the overall experience. Simplistic customer satisfaction and advocacy scores may mask the underlying factors that either contribute to or detract from an exceptional customer experience.

Evaluating how each individual touch point contributes to the overall experience in this scenario can help to identify specific areas for improvement. While touch points 1, 3 and 4 scored high, touch points 2 and 5 clearly have room for improvement.

Focusing only on an aggregate metric without understanding or managing the contributing factors can yield unpredictable results. Companies seeking to improve their overall customer experience should establish customer experience measures that correlate individual touch point results to overall customer experience measures.

END NOTES:
“How Do I Touch Thee? Let Me Count the Ways.”, The Clear Brick Blog, April 16, 2008.

Inside Jobs, November 14, 2008

The Customer Experience Process

Companies seeking to become more customer-centric should define the customer experience as a formal end-to-end process in their organization.

Business leaders that subscribe to the process-centric approach to business improvement understand the importance of having well-defined end-to-end processes. Typical end-to-end processes that are well-defined and optimized in businesses today include:

• Plan to Profits (Budgeting & Finance)
• Order to Cash (Operations/Order Fulfillment)
• Procure to Pay (Procurement)
• Recruit to Retain (Human Resources)
• Idea to Market (New Product Innovation)
• Forecast to Delivery (Manufacturing & Distribution)
• Market to Sale (Sales & Marketing)

For those organizations that have formally adopted a process-centric approach to business, the process is often formally defined, measured, monitored, and continually optimized. This level of discipline is critical to deliver a process that is high performing, predictable, efficient, effective, and error-free.

In order to become more customer-centric, businesses should add the customer experience end-to-end process to their portfolio of strategically important processes. The customer experience is a process. Like any process, the customer experience process can work perfectly (or go horribly wrong), may contain numerous scenarios, and it can be analyzed, re-engineered and optimized.

The customer experience process does not begin and end at the store, sales representatives, web site or call-center. It extends from the moment the customer becomes aware of a company and may last until they die, move, or leave for a competitor. In short, the customer experience process is broad, deep, iterative, and (hopefully) long running.

The customer experience process is comprised of three distinct phases:

1. Customer Attraction (before): Customer attraction represents all of the touchpoints and interactions encountered by your customer during initial sales and marketing activities.
2. Customer Interaction (during): Customer interaction represents all of the touchpoints and interactions encountered by your customer during payment, service, and delivery activities.
3. Customer Cultivation (after): Customer cultivation represents all of the touchpoints and interactions encountered by your customer after a purchase or transaction that includes loyalty, reward, and ongoing communications management.

Great customer experiences don’t happen by accident. They require a keen attention to detail, a focus on every touch point, and an orchestration of all customer encounters regardless of how each customer may navigate the company. Mastering the customer experience must begin with mastering the end-to-end customer experience process.

At any time that a customer is involved in the process, the ultimate goal is to deliver a customer experience process that sells more, increases buying frequency, and broadens the relationship. A critical first step to improve any customer experience should be to map the entire customer experience end-to-end process. By doing so, companies can develop a deeper appreciation for how the business interacts with their customers.

To achieve the focus and discipline that the customer experience process deserves, businesses should add a new end-to-end process to its portfolio of strategic processes. By defining the customer experience as a strategic end-to-end process, the customer experience process can be studied, measured, monitored, refined, re-engineered, optimized, and improved. The process will become much more disciplined and receive the attention it deserves in the organization.

Find Your Torch Points

Without a doubt, Customer Relationship Management – or CRM – has become a mainstay in current day business vernacular. Business professionals now talk effortlessly about touch points, customer experience, customer segmentation, and cross-channel integration. CRM has come a long way since its early days, but there’s still a lot of room for improvement.

Despite the maturing of this once nascent business capability, companies continue to struggle to consistently deliver seamless, effective, and meaningful customer interactions. It’s no wonder that customer satisfaction can be elusive for so many companies.

Although most companies will proudly tout their CRM capabilities, the true measure of success is customer satisfaction. The stakes are indeed high; in a competitive market, the ability to build and nurture customer satisfaction can make the difference between success and failure.

Too often, however, even the best of CRM intentions can miss the mark; promotions can miss the mark, cross-channel experiences can be inconsistent, and call center navigation can be inconvenient. When issues arise, they create a torch point; a defect in the CRM process that can leave the customer wanting or frustrated. The severity of each torch point can diminish customer satisfaction or lead to outright defection.

Finding the torch points in your business requires an unrelenting focus on quality, a heavy dose of process discipline, and an industrial strength measurement capability.

Consider the automotive industry; manufacturers were taught a costly lesson that defects and lower quality led to rapid erosion of customer satisfaction, brand perception, revenues, and profits. Automotive manufacturers responded by developing an unrelenting focus on quality; they managed process quality, measured every minute detail, and developed robust product testing capabilities.

In our automobile example, defects are easy to spot; when the car won’t start, the transmission fails, or the air conditioning goes out – it’s pretty obvious that there is a problem. In the CRM world, however, the torch points aren’t so readily evident. Businesses have to look closer to see where their customer relationship capabilities might be breaking down.

CRM torch points can occur in a variety of situations or interactions. Here are just a few examples that seem to occur too often in today’s business environment:

1. Account number fumble: When a customer contacts a call center they are asked to enter their multi-digit account number. Yet when they get transferred to a live customer service agent, they are asked for this information again.
2. Promotion defect: A consumer products manufacturer or retailer runs a promotion on Father’s Day weekend for 20% off a particular item. Some customers snap up the deal but forget to bring their coupon or specific promotion code. If and when the customer returns with the coupon to collect the 20% discount, the store won’t honor it since it is now past the promotion period, even if the customer has the receipt to prove the date of purchase.
3. Sorry, wrong channel: A customer visits a web site only to find that they can’t find the product they were looking for unless they visit the store. Conversely, they visit the retail store only to find out that they are out of stock and are directed to the web site to see if it’s available online.
4. No card, no benefit: Many businesses utilize the ever-popular loyalty card to dispense rewards or discounts. An extremely loyal customer drops into their preferred store without their loyalty card. Despite being an extremely loyal customer, the store refuses to dispense any rewards or discounts without the physical loyalty card.
5. Feel the pressure: Cross-selling and up-selling can be lucrative for many businesses, but applying pressure sales to get customers to buy more can often have a negative impact on the customer experience. A customer that is ready to complete their shopping experience is confronted with a pressure sales environment trying to get them to ‘buy more.’

These are just a few simple examples of torch points that can occur anywhere in the customer experience lifecycle. Even the best of CRM intentions can sometimes miss the mark; promotion policies can create buyer’s remorse, cross-channel experiences can be inconsistent, and call center navigation can be inconvenient. When CRM torch points arise they can leave the customer wanting, frustrated, and unsatisfied.

If your business smells CRM smoke, it might be time to put out the torch point fires.

Do you know where your CRM torch points might be?

How Do I Touch Thee? Let Me Count the Ways.

Customers come, they buy, and they go. Often, the only lasting impression they leave with your company is a record of the financial transaction. Sure, it would be easy to say that they had a good customer experience. They bought something didn’t they?

But hold on big fellow.

The total number of touch points that the customer encountered goes well beyond the point of sale. Getting your head around all of your company’s touch points – and how your customers navigate them – can mean the difference between customer joy and dispair.

So, how do you touch your customers?



Defining when and where the customer experience begins and ends is perhaps the most difficult task facing any business. Too often, companies define the lifecycle and customer touch points too narrowly, leaving critical elements of the customer experience to chance. Consider a carpet cleaning company who focuses only on the transactions; did the carpet get cleaned or not? They are missing the more important elements of the product (cleaners), service (servicemen), customer contact, appointment scheduling, flexibility, timeliness, and payment options. The carpets may have been cleaned, but the customer could be disgruntled due to a number of these other factors.

So what exactly is a touch point? We define a touch point as any customer interaction or encounter that can influence the customer’s perception of your product, service, or brand. A touch point can be intentional (an advertisement) or unintentional (an unsolicited customer referral). In this era of customer skepticism, often the unintentional touch points matter the most. Which would you trust more: a company’s ad pitch or your best friend’s personal referral for a product? Both are touch points, but one carries much more value than the other.

When your business interacts with a customer, it’s often easy to overlook what is really going on; you are touching them in many, perhaps subtle, ways. When it comes to customer experience management, the right touch can make all the difference. To do it right, you must first identify all of your potential touch points, then work to optimize each one (if possible).

Consider this (short) collection of potential touch points:

Customer Attraction Phase

Touch Point	Description
On-Line Ads	Whether you are using display ads or pay-per-click (PPC) text ads, what you say and how you say it can have a lasting impression on your customers.
Radio Ads	Radio ads, often only 15 to 30 seconds in length, must engage the listener and leave them with a compelling call to action.
Television Ads	Television advertising, which has traditionally been reserved for only the heftiest of advertising budgets, is now becoming more affordable to small & medium sized businesses through firms such as SpotRunner.com.
Print Ads	A tried and true ad approach, print advertising can be an effective – but sometimes costly – approach for promoting your business or products & services.
Direct Mail	Direct mail continues to be a popular way to reach your target customers. When done right, direct mail can be an effective and efficient touch point for attracting customers to your business.
Signage	For brick & mortar businesses, external and internal signage can be an important touch point to cast the right impression and attract customers to your store or office location.
Press Release	The press release is tried and true publicity tool that can represent a highly effective touch point to inform customers about your business.
Sales Representative	Field, floor, door-to-door, or telephone sales representatives all touch your customers in different ways. Understanding and managing this important touch point can have a dramatic impact on customer conversion.

Customer Interaction Phase

Touch Point	Description
Facilities	Whether you are a retail store, bank, hospital, certified public account, or auto repair shop, your facilities will say more about your business than you might think. Don’t just think about your physical building. Consider all factors such as parking, ingress & egress, and signage to your building.
Employees	Each time one of your in-store employees and customer service representatives engages in a dialog, your customers have been touched. As you might expect, not all encounters are the same. Depending on the training, experience, mood, and emotion, each discrete touch point encounter can leave dramatically different impressions.
Product Presentation	Product presentation is often a critical factor in the customers buying process. If the product looks cheap, it probably is. Keep in mind that product packaging can leave an impression well beyond the point of sale.
Store Layout	In the case of retailers or wholesale businesses, the layout of the aisles and checkout lanes can have a dramatic impact on the shopping flow and experience.
On-Line Landing Page	In the on-line world, the landing page is perhaps the most important of all touch points. It represents a major opportunity to engage the customer, inform them of the benefits of your product or service, and convince them to take action.
On-Line Shopping Cart	Not all on-line shopping experiences are created the same. Consider the steps that are necessary for a typical customer to select, pay, and receive their product on-line. Too many steps can leave them with a poor impression.
Point of Sale/Point of Service	For bricks and mortar business, the point of sale gets all the attention. It represents the most tangible touch point where the customer completes the transaction. Loyalty points or rewards can be redeemed, and payment is received. Although it is an important step in the customer experience process, it represents only a small fraction of the total experience.
Point of Service	For service companies, the point of service is typically where the service is performed. For physicians and hospitals, this may be the examing room. For in-home services, it may be the customer’s home. For professional services, it may be the client’s office location. In all cases, the point of service represents a major touch point.
Invoice	For non-cash businesses, the often overlooked invoice can represent an important touch point in the overall customer experience. Does it provide adequate supporting details? Are payment instructions well defined?

Customer Cultivation Phase

Touch Point	Description
Customer Support	When your customer calls, or writes, how will your business respond? The customer support touch point can be influenced by responsiveness, and the degree to which the customer’s problem is quickly – and definitively – resolved.
Alumni Relations	For colleges & universities, alumni relations are critical. Businesses should pay attention. How businesses interact with former employees is also important. Don’t overlook this important touch point.
Newsletter	Newsletters, both print and on-line, can represent an effective way to maintain a dialog with your customers, well after the original transaction.
Blog	Blogs (formerly known as web-logs), are a growing method for individuals and businesses to establish an open dialog with their customers.
Customer Testimonials	What your customers are saying about your product or service is an important touch point. Often these unintentional touch points can have a much greater impact on customer perception that any other.

A typical customer encounter with your company may include numerous interrelated conversations, referrals, or advertisements that influence the customer experience. Each encounter, observation, or influencer touches the customer is some way and contributes to the quality of the customer experience.

Together, the collection of touch points represents the individual notes in your customer experience song. Some touch points may add significant value while others detract from the overall customer experience. Identifying the touch points and understanding their role and contribution to the overarching customer experience process is an important step in mastering the customer experience.

Obviously, you can get significant benefits by optimizing each touch point. Touch points may include different stakeholders or representatives of your company and span all channels. The objective should be to improve the overall ease, convenience, and quality of each customer touch point. By optimizing your touch points, you can increase the transaction amounts of your existing customers, improve customer loyalty, and improve overall customer satisfaction.

Touch points, when understood and coordinated effectively, can make a sweet symphony for your customers.

Now go make some music.