Here’s another example of the commoditization of the “customer experience” concept. This picture was taken this week in a street of downtown Rome, Italy.
This bar promises a “food experience” and curiously displays in a series of showcases outside an unusual association : water bottles and advertisements for jewels.
My take:
If you got it, just drop me a line.
With each trend comes a drawback; even in marketing.
Look at the customer experience for instance. This concept does make a lot of sense and I firmly believe it is a source of success for all companies, whatever the business, be it in the B2B or B2C sector.
The problem is actually that the customer experience, which finds its origin in the academic world and which was later popularized in business books, turns today to be commoditized. What a pity. Look around you: from the smallest shop to the biggest retailer, you are promised, as a customer, to get an experience. It can be a “brand” experience, it can be a “food” experience (a very common motto), it can be a “travel” experience, you name it. But what does it mean? Does it actually mean something to those who chose the slogans to be put in golden letters in front of their stores, shops, website? In most cases I doubt it.
While in NY I went to one of the few malls of the city on Columbus Circle. On the 3rd floor you can find the Samsung store which is pretty unique since you can not buy anything. But it is true that you can “experience” the products (read “use them”) in their environment. The store resembles the Apple store but doesn’t succeed in appealing to senses the same way. I couldn’t feel part of the community like when I was in the Apple flagship store on 5th Avenue. Samsung tried to create small clusters within the store to have products in their natural environment (for instance kitchen or TV room) but it gave me the impression of an environment à la IKEA. Apple managed the experience better by SIMPLY having all attention of the customers focusing on the products displayed.
What seems to be also a crucial element of the experience are employees (OK I admit that was an easy one). Managing the employee experience makes part of the job since it will impact the customer experience too. Once again take the example of Samsung. With the exception of the phone and tablet corner (which was obviously copied from Apple) the other clusters failed to deliver from an employee experience perspective. Few and cautious employees watching TV and not looking for the eye contact with the customers, forgetting to smile. For those of my readers who live in Europe (especially in France, Belgium or Germany) it may all seem very normal as the service culture is deficient in those countries (I remember for instance a disastrous experience at Vandenborre, the equivalent of the French Darty, where I lost 10 minutes in an empty store while all 5 salesmen were watching TV, laughing and making jokes while I was desperately waiting to be served).
My take:
Before you promise an experience to your customers make sure that it is a positive one. All too often brands do not deliver on their promises because they do not care about what the customer really deserve to experience and do not master all the facets of it. More on the Vandenborre experience in a next post.
The Eataly store, located on NYC 5th Avenue, was a real nice discovery of last week’s trip. The store creates a true Italian shopping experience and adds a few innovations that enhance the customer experience.
Rather than going in the details I’ll keep this post very short and just share with you Eataly’s policy. No need to comment a lot. The policy is clear, somewhat unconventional and that’s why I love it.
I’m just back from a week in New York where I followed a workshop on the management of Customer Experience at the Columbia Business School. From the work sessions with my colleagues we found out that the CEO plays an essential role in setting up an environment which is likely to create a positive customer experience. Think about Steve Jobs for instance, but not only.
Livia Marotta of Swarovski mentioned a less know example of a deeply-involved CEO : Mickey Drexler of J. Crew. Stores are equipped with a speaker which Drexler uses to speak to his employees. In his speeches Drexler is passionate about product- and service-related tiny details and imperfections that he wants employees to correct and to report. I went to a J. Crew store on Columbus Circle to check this out and guess, what … it’s true. Here’s a picture of the speaker.
My take:
Beyind the anecdot which some of you may think of as micro-management, the CEO’s involvement in the smallest details of his company allows him to make his / her presence very vivid to all employees. Can you think of something less motivating that not knowing who and what you are working for?
Employees motivation and employees experience are critical to build a lasting customer experience. Many European brands should learn the lessons out of it.
Think about it for one moment. Three-hundred years ago, when you needed let’s say a tool, you just had to go to a craftsman who had specialized in manufacturing that very tool. At that time, such a craftsman was mastering all the facets of the job: he was able to work the metal, forge it, was carving the wood and eventually assembled the two pieces to make the desired tool.
How does it look like today? Tools have more or less kept their shapes. It’s still an assembly of a piece of wood and a piece of metal, more or less of the same shape, but the way those two pieces are made has changed dramatically. Assuming that the tool is made in China, I bet that the piece of wood is sent from one plant to another where the piece of metal is made to finally be assembled. The piece of metal is probably preformed and also shipped from another plant which has specialized in manufacturing pre-formed shapes of metal for different usages. Once it has been delivered to the assembly plant the pre-formed piece of metal is finalized. One worker performs an operation and passes on the result to a next worker who also does something on it, and so forth and so on.
Everyone is getting micro specialized and performs only a fraction of a task and gets paid for his performing of a micro-task.
What’s the link with customer centricity? Well, it goes like this.
Three-hundreds years ago our tool maker was mastering the whole process. Not only was he in charge of the manufacturing but also of the commercial part of the job and of the after-sales part. He was recommending a tool to a client, was perhaps adjusting (today we would say “customizing”) it to his very needs, manufactured it and finally repaired it after a while. That way he was constantly in touch with his customer and knew who he was serving.
The industrial revolution and the Taylor’s theories changed all this. With the division of all tasks into sub-tasks and the subsequent micro-specialization of each individual, the firm as a whole lost the link with the customer. We have no longer customers. We have internal customers. And we’re loosing the link with the customer-payer.
This situation has given birth to new theories on how to make the customer more central in an organization. Consultants are selling methods, tools, principles which firms buy in the hope of getting back in touch with the customers. After all, as Peter Drucker said, the purpose of a firm is “to acquire and keep customers”. How do you want to keep them if you don’t know them? Beyond the mere value of the object we’re looking for something else and the relationship with the vendor may be a piece of the answer.
My take:
No matter how hard you try, no matter how much money you pay for consultants advices, fact is that smaller organizations are better at keeping the link with the customer. This is why large corporations are constantly trying to mimic SME’s behaviors. I’m actually wondering, while writing this, whether losing customer focus isn’t a growth pain after all.
I remember to have read once that strategists in the army have found out that the maximum number of individuals in an organization should be less than 150 if you want to keep control and be able to know everyone. It may sound silly but what about re-clustering your organization into smaller groups in an attempt to be more autonomous and behave like a SME? That may be a good step toward re-centering around your customers.
I discussed in a previous post how unprofessional real estate agents in Brussels seem to behave. A quick survey showed disastrous response rate from real estate agents, about 90% of them failing to answer a written inquiry.
In my conclusion I explained that this inefficiency was a great opportunity for real estate agencies which would correct their weaknesses and re-center on customers (real estate agents have two types of customers – buyers and sellers- with complete different needs). It seems that Century 21 in France has understood the underlying potential and announces on its website a series of 21 actions to improve the service to the customer.
On its website Century 21 presents its 21 gold rules. Next to intention statements, a series of original initiatives is presented that seems to me to be of somewhat value for the customer.
My take:
Century 21 found a smart way to innovate in an industry which, apparently, was conservative in terms of service quality. No need to say that those “golden rules” will soon be imitated and that Century will need to stay ahead of the wave. What will be the next step? Well, believe or not but I have already a few ideas of new ways to connect with the customer.
I gave a presentation yesterday at the Solvay Business School in Brussels which served also as marketing course to MBA students.
The purpose was to present to students a topic of importance within the current marketing research, namely the shift from product marketing to service marketing and how this shift is concerned with customer’s involvement.
This breakthrough in thought took place in 2004 when Vargo and Lusch published their now famous paper “from …”. In my presentation I dealt with one aspect of their paper that they discuss in their Foundational Premise #6: the customer is always a co-producer of value. Vargo and Lusch used the word “co-creation” and I researched the history of co-creation which goes back into the late 1970s.
I wanted to give a practical and not-boring presentation and used a lot of examples. If you’d like to read this presentation it is available online, free-of-charge. You just need to go to www.IntoTheMinds.com and fill in the form to access the extranet. Once the access is granted you’ll be able to visualize all public documents that IntoTheMinds puts at his clients and prospects disposal, among others this presentation.
I was visiting a client in the south of France last month and on my way back, in the plane, I was seating (as it is too rarely the case) next to a very sympathetic passenger who was willing to chat a little bit. I had a wonderful trip back to Belgium discussing some business-related issues with this entrepreneur who was thinking about selling his company. The company was apparently in good shape, made good profits and had a robust margin, and was active in an unusual niche since it was designing and selling crosses to manufacturers of coffins. Not the most usual industry to make money, right?
The entrepreneur, having discovered in the conversation that my company was also advising customers on how to sell their company, questioned me about his very company and we discovered a few mistakes that would impede him to sell at a good price.
Here are a few tips that you may want to keep in mind when the time will come to sell you “baby”
1/ processes, processes and more processes
The main problem of a potential buyer will be to make sure that the business will keep growing and that targets will be met. In the absence of written rules, which help automatize internal processes, the business continuity will be impeded after the business has been taken over. When it depends too much on non-written rules, a business will suffer once its owner / manager has left.
2/ what’s your competitive advantage ?
Here’s an advice I give to 99% of entrepreneurs. You’ve been managing your company for a certain number of years but have you thought about what makes your company so strong and unique in the eyes of your clients? You may think it’s basic textbook marketing but it does work and it is simply not practiced in SME’s.
This being said, you may have an idea already of what makes you so attractive. Don’t stop here. Put this on paper, check that your assumptions are right and use them when looking for new clients to make sure that it works. The next step, when you’ll have found where your strengths are, will be to make it known to potential investors. They will love hearing about competitive advantage and see of professional you went in working on your marketing. Actually you should always make sure you use the same language as your investors. Chances are big that the latter are professional and highly educated. They will have expectation and the best way to make sure that they love you is to tell them what they want to hear in the language they know best.
3/define, measure and prepare your KPI’s
Define and measure the evolution of you most important KPI’s. I’m not here to teach you how to compute your ROE, ROI, … However I’d like to draw your attention on the importance of non-financial indicators which are as important as financial ones. The growth perspectives of a business will indeed depend on marketing indicators such as loyalty rate, word-of-mouth rate in the acquisition of new clients, acquisition costs.
Had you at least thought that such indicators may help you, one day, sell your company? And if it is the case, what have you done to actually define and measure (the hardest part of the job) those indicators?
My take:
You’d better get prepared if you intend to sell your company. It is the dream of most entrepreneurs but very few realize that the preparation should start well in advance to maximize the price you can expect. I think that two years is a minimum to start organizing for the sale, three years being in my opinion a sufficient period of time for any SME.
