Sunday, September 30, 2012
A consideration: what we most often do in designing user experiences or customer service is not focused on making customers happy, but on reducing the degree to which they are made to be unhappy in the course of performing tasks necessary to select, obtain, and service a product. That statement might seem like playing with words, but I have the sense there's more to it than that.
Western philosophy, going back to Aristotle and perhaps his predecessors, tends to prefer dichotomy: we define the phenomenon of "A" and begin with the perspective that all things are either "A" or "not A" and assume a continuum to exist between them - likened to magnetic charges where we can create a positive by reducing the negative, but things are not always thus. In terms of happiness, this leads us to the perspective that there are two states of being - "happy" and "unhappy" - and that the way to influence another person's attitude and influence them to become happy can be achieved by negating their unhappiness.
Set aside the assumption of continuum for a moment to consider happiness and unhappiness as two distinct things, each unto themselves. Rather than happy and unhappy representing the extremes of a continuum, such as the on/off states of a bulb or the degree to which a dimmer causes the bulb to shine, consider instead that the relationship of happiness and unhappiness is more akin to two separate bulbs, and the one that is brighter illuminates our perspective. That is, it does not make the other one more or less bright, it simply outshines it.
Stretching the metaphor of the bulbs further: consider happiness to be a red bulb and unhappiness to be a blue one. Our perspective, illuminate by these bulbs, is a shade of purple. Decreasing current to the blue "unhappy" bulb causes our perspective to be rosier by decreasing its brightness but it does not cause the red "happy" bulb to be any brighter.
Increasing electricity to the red bulb has the same effect, but again without causing the blue bulb to be any dimmer - but it strikes me that, in terms of customer experience, this is not a common practice. We presume that the customer's red bulb will be lit merely by obtaining the product (good or service) that we provide, and our work is focused on dimming the blue bulb or at the very least being attentive to the things that might brighten that bulb so that we might avoid doing them.
This begs the question as to whether the product we provide is, in fact, the red bulb, or merely a source of power to it. For example, no-one who purchases an airline ticket is happy simply because they have a ticket, or the seat on the plane, or even the experience of travelling. The red bulb they seek to light is being at their destination and the product we are selling is the means to achieve that end - and there appears to be nothing we can do to make them happier with the outcome, so we can only decrease the unhappiness they feel with the process.
However, it's also worth considering that happiness often pertains to the emotional experience of achieving a goal rather than the emotional state as a result of having achieved it. Consider another example: a person who has won a thousand dollars at gambling. The "high" they feel while they are playing the game and winning is substantially stronger than the emotions they might have after cashing in their chips and holding a stack of fifty twenty-dollar bills.
I'd posit that if they derive any pleasure at all in having the money, it is because they are imagining what they can obtain from spending it - which is to say that such a person is still in the process of goal-achievement, not at the destination. So if she were to spend that money on a piece of jewelry, the happiness she feels in owning it is significantly less than that she felt in the pursuit. In fact, after a few years, she might find that she very seldom wears the item - it has ceased to give her happiness.
In such instances, we find the notion that material things do not create happiness - that we enjoyed the idea of obtaining it, and derived happiness from the process of obtaining it, and our possession of it is merely a by-product of this activity. While the product may have initially given us some happiness of ownership, that fades quickly. And it may well be that the happiness we derive from material things is merely a remembrance of the emotional state we were in during the act of pursuit - just as the gambler in this example might enjoy wearing the jewelry because it reminds her of the thrill of winning the cash she then used to purchase it.
But I think I've gone a little too far down this rabbit-hole, and need to drag myself back to the intended topic: whether what we do as customer experience practitioners is focused on increasing happiness or decreasing unhappiness - and I think I can stand firmly on the earlier point. As practitioners we seek to make customers happy, but were are in fact merely decreasing the influence of the factors that make them unhappy.
I'm not yet ready to meditate the topic of how to create happiness, as I must admit that the preponderance of my training and experience has focused on "reducing unhappiness." I've got some studying to do, likely quite a bit.
Wednesday, September 26, 2012
I've seen the same basic analysis done in three different topics I often read about (leadership, training, and selling) and am presently struggling to piece it all together, so what lies ahead may be fractured and highly speculative, but here it is ... when influencing human behavior to whatever end, an important consideration is the level of knowledge and motivation the subject brings to the process. If your strategy does not account for these factors, and account for it accurately, it is doomed from the start.
Knowledge pertains to the information a person has about a given subject and the certainty that they feel in that knowledge. There is some disagreement over whether it is important for that knowledge to be valid, though "validity" tends to become subjective beyond the basic observable facts, and it seems reasonable to make some distinction between a person who has a head full of disinformation versus a person who has valid information.
Perhaps this would lead to a different analysis, but for the present, it's neither here nor there. The correctness or incorrectness of knowledge is often highly subjective: one person accepts as true what another dismisses as false. The important thing in this consideration is whether their knowledge, fact or fallacy, is in line with your own knowledge.
A misinformed person is worse, and more dangerous, than a completely uninformed person. The road to hell is paved with good intentions - to which I would add "... good intentions of half-witted and misinformed people." But whether a person is ignorant or misinformed, the task of a person who means to exert influence requires considering the degree to which the subject shares knowledge with the influencer.
On the basis of knowledge alone, exerting influence or introducing new information requires a careful consideration of the knowledge the subject has. Presume that the subject has more knowledge than he does, and you may fail to provide adequate direction to undertake the desired course of action. Presume that the subject has less that he does, and he will be annoyed and offended by your approach, and in a less-than-compliant state of mind.
Motivation pertains to the intrinsic desire of a person to undertake an action. In general, it pertains to the way in which he believes that undertaking a given action will serve his personal interests. Even when a person is, or claims to be, acting for the benefit of others, the emotional/esteem reward of being an agent that delivers the benefit to another person is still the personal benefit of the agent himself.
As with knowledge, motivation has its negative side: a person may be highly motivated to refrain from undertaking an action that someone else may wish to influence them to undertake. The suggestion may be undesirable in itself, or given that there are limited resources, the subject may acknowledge the value of the action but feel that their time and money is better spent on other things.
On the basis of motivation alone, gauging the subject's level of enthusiasm is also a critical element of influence. Presume a person to be motivated when they are not, do nothing to motivate them, and they will remain inert. Presume a person to be unmotivated when they are motivated, and the effort you put into motivating them is unnecessary and frustrating, as your attempt to motivate them is actually impeding them from taking immediate action.
High Knowledge, High Motivation (HKHM)
Considering the two factors together: influencing a person who has high knowledge and high motivation is not merely easy - it's altogether unnecessary. Such a person knows what he wants to do and very much wants to do it, and your task as an influencer is moot. The best thing you can do is shut up and step aside and let them do what you were going to attempt to influence them into doing in the first place.
Arguably, you can act as a facilitator: help them to do it or remove any obstacles that may be in their path. However, this can be counterproductive if you are too proactive. A knowledgeable and motivated individual will find their own path and circumvent obstacles to their goal, and if any well-meaning action you undertake to facilitate ends up creating an impediment, you're doing more harm than good to their cause and your own.
High Knowledge, Low Motivation (HKLM)
By contrast, the subject with a high level of knowledge and low motivation is likely the hardest person to lead, teach, or sell. They feel, right or wrong, that they are very well aware of the potential benefits of taking an action, but do not believe the benefits to be worth the cost and effort of undertaking it. And as such, they remain stubbornly resolved to refuse.
The approach to dealing with HKLM subjects generally assaults their knowledge: convince them that they are wrong and what they know is false, replacing their invalid knowledge with valid knowledge, and it is presumed they will then find the motivation to undertake the desired action (now that it is, indeed, desirable). This is a difficult proposition, as many people are very guarded of their beliefs and any suggestion they may be incorrect will be met with resistance.
However, this approach is based on the premise that the subject's knowledge is, in fact, wrong. Perhaps an important question to ask, even before considering the task of changing their perception, is whether your own perception (or the one you wish to instill in them) is correct. There are many instances where a given product is legitimately of no value to a given customer and it would be unethical to attempt to convince them otherwise.
Perhaps the best approach, in this instance, is not to approach them at all - to be watchful for a time at which their attitude changes or, gently and in small doses, wean them away from the contrarian point of view. Even so, it may in some instances be impossible (or at the very least, have an abysmal ROI) to do so.
Perhaps the best approach, in this instance, is not to approach them at all - to be watchful for a time at which their attitude changes or, gently and in small doses, wean them away from the contrarian point of view. Even so, it may in some instances be impossible (or at the very least, have an abysmal ROI) to do so.
Low Knowledge, Low Motivation (LKLM)
At the opposite end of both spectrums, the subject who has low knowledge and low motivation requires a great deal of effort to influence. This is a common quandary for salesmen of unwanted products, but it's actually a great deal easier to address than the previous category because it deals with awareness.
That is to say that the subject is not resistant to a proposition because he (feels that he) knows it to be undesirable as would the HKLM subject, merely that he does not know why it should be desirable. If given the knowledge, he may recognize the value and his motivation will be kindled.
This is not an instantaneous solution because the tactic works only one of the vectors, and placing too much emphasis on knowledge can shift this individual into the HKLM category, which is simply dreadful. The knowledge that is imparted cannot be information for information's sake, but tied to a purpose, the benefit to the personal interest of the subject.
This seems to be the approach that most personal selling takes: it is assumed that a person will be amenable to buying a product if you provide information and connect it to personal interests. Both are necessary to gaining compliance, but chances are that one or the other may not be necessary to a given customer who is already knowledgeable or motivated.
Low Knowledge, High Motivation (LKHM)
The LKHM subject seems a paradox - how would a person have a high level of motivation to undertake an action that he does not understand? However, it's quite common. Consider the behavior of most teenagers and young adults, who are strongly motivated towards things they do not understand (sexuality being the most obvious example). Consider the behavior of an adult who has only a vague notion of what to do about a need he does not understand (medical care or insurance). It's not as rare as it might seem.
Unlike the HKHM subject, the LKHM cannot be left alone to act on his own because he does not know what to do. He is in a state in which assistance is necessary and very much appreciated, and it is this kind of person who will be eagerly malleable by a leader, teacher, or salesman who offers assistance in discovering a solution he does not understand to a problem he is keenly aware of.
Success in motivation to the immediate action is unnecessary - this individual is already highly motivated - but should not be done with reckless abandon because of after-action remorse. If you consider immediate success only, it's simple to con the LKHM subject into doing whatever you suggest - but if you are seeking to have an ongoing relationship with them, you must cautiously refrain from encouraging them to do things that will be more harmful than helpful in the long run: the subject will eventually reflect on the encounter, and will be filled with hostility and resentment to an influencer who took advantage.
Finally, a caveat: I'm not sure if this schematization is quite right. In mulling over the four categories, there is a lot of interplay between knowledge and motivation, and it occurs to me that knowledge might be seen as a component of motivation rather than a separate factor. It could be that the terms are not as well defined as they ought to be, or a closer analysis of the phenomena could reveal that they are entirely correlated. However, it seems for the present to be sensible.
Saturday, September 22, 2012
I've been studying methods for training employees, and it's occurred to me that there are a striking number of parallels between the way in which a new employee settles into his role in the workplace and the way in which a new customer settles into a long-term relationship with a vendor. I'm not sure I've got it quite worked out, so this is very early thinking on this topic and likely needs further refinement:
The Phases of Learning
The material I've been reading has focused on a model that defines four phases of learning. It's widely used, and there isn't a reliable indication of the original source, but the various sources I've seen generally align to suggest that a person who is learning goes through four phases:
- Unconscious incompetence - The trainee doesn't know what he needs to learn in order to be successful, and experiences a great deal of confusion and frustration.
- Conscious incompetence - The trainee has a sense of what he needs to learn to do, but has not yet learned it and cannot do it, and begins to learn parts of the task.
- Conscious competence - The trainee has learned all the things he needs to know and applies them, but a great deal of conscious and meticulous effort.
- Unconscious competence - The trainee knows all the things he needs to know and applies the effortlessly - the task has become "second nature" to him and training can be considered complete.
In terns of training employees, a trainer can be more effective at training by having an awareness of the trainee's mental state and adapting his approach to accommodate it: for example, a trainee in the "unconscious incompetence" phase experiences a great deal of confusion and frustration and needs intensive support, both functionally (telling them what they need to know) and attitudinally (helping them cope with their frustration). A trainer is less effective at training if he withholds the kinds of support that are needed at a particular phase, or provides the wrong kind of support at any given time.
It seems to me that the same process is followed by a customer when entering into a relationship with a supplier. In a very literal sense, they are learning how to interact with the supplier to get what they want, as well as learning how to interact with the product or services provided in order to get the benefit/value they wished to obtain from it.
The unconscious incompetence phase is characterized by a customer who doesn't know what he needs to learn in order to be successful. It's likely true that this phase may have two steps - the first of which is a period in which the customer does not have a sense of what it means to be successful at all and may not consider success to be worth the effort, and a second in which he has the notion of success and a desire to be successful, but does not know quite how to go about it.
The first step is shortcut in a training situation because it is assumed that the trainee understands the value he will obtain from the training. Especially in employment situations, the fear and uncertainty is overshadowed because he is under duress: most employers have an extended "probationary period" that constitutes an implicit threat of termination to the employee, and that threat is highly effective in motivating them to overcome their uncertainty and frustration.
When it comes to customers, suppliers generally cannot leverage the ability to threaten them - though some have leveraged the notion of an implicit third-party threat to scare the customer into engaging with them: promotional messaging communicates the harm a person will suffer, or at least the benefits that they will not receive, if they fail to engage with the vendor. Consider marketing messages sent by firms to sell insurance, home security systems, preventative healthcare, and the like.
The second step in this phase is an orientation period: the customer is presumed to be interested in engaging, but is not sure what engagement entails: what will he be required to do? By giving him the sense of what is to come, a supplier can provide a clear path to success and make the task seem surmountable. The supplier must provide a great deal of functional support (informing the customer of what needs to be done) as well as emotional support (assuring them they are capable of doing it, and encouraging them to start the process).
In this phase, the customer has a clear understanding of the big picture and each step in the procedure, but still has uncertainty about how to perform each step. It seems to me to be very similar in nature to the previous step, just at a more granular level.
That is to say that the customer may perceive the benefits he can obtain by purchasing a product and have an interest in obtaining those benefits. He is likewise aware of a specific task he must perform in order to get through the process, but does not know how to get through it. He may not know how to complete a given step at all (place an order) or he may have a sense of what the step entails but get hung up on a granular detail (specify the color he wants).
An engaged customer might be inclined to ask questions that will help a vendor guide him through a specific task. How do I place an order? At what point in the process do I give you my credit card number? How do I tell you what size I need? Serving the engaged customer is relatively easy: the seller simply waits for a question to be asked, and then answer it.
However, a customer might not be fully engaged, and may still have difficulty verbalizing the concerns he has. This seems less likely at this point, as the customer is engaged in a process he understands and needs to know how to do something that is relatively simple, but it can't be taken for granted. For example, the metrics on a Web site might indicate that customers tend to exist an ordering flow when they encounter an obtuse question, rather than searching for information that will guide them to answer it.
My sense is that this is a difficult phase for the vendor. If the vendor is too passive and waits for the customer to ask a question before providing information, he takes the risk that the customer will bail out rather than soldier on. If the vendor is too aggressive and is constantly providing information that the customer does not need, the customer may feel hectored and lose interest in proceeding.
In this phase of learning, a trainee knows what he needs to do to succeed, but does so slowly and in a very meticulous manner. He feels that he is competent, but has a great deal of self-doubt and the slow pace at which he proceeds reflects a degree of uncertainty in his own capabilities.
This seems to me to be identical to the "engaged customer" in the previous step - a person who has a sense of what they are doing but pauses. It seems likely that this overlap is inevitable: even if a task is completely new to a person, there are likely parts he does not need any help with (he may never have filled out an order form for your product, but he doesn't need you to tell him how to enter the quantity) and even if a task is unfamiliar to a person, there will be parts in which his uncertainty gets the better of him, or for which his memory fails him, and he will need a reminder.
In any case, a customer who is in the conscious competence phase likely does not need much support from the vendor - and would be particularly resentful of a seller who constantly interposes himself to tell the customer how to do things that he already knows what to do. And as mentioned, passive support is likely the best approach: to wait for the customer to ask a question before providing information.
It may not be particularly difficult, but it is delicate, to passively observe a person perform a task in a slow and deliberate manner, seeming to be uncertain of himself, without inflicting unneeded and unwanted instruction.
The final phase of learning occurs when the trainee has the knowledge and the confidence to proceed, and performs tasks as if they are second nature. Arguably, this isn't part of the learning process at all, but the state at which the learning process has been complete - the person is no longer "a trainee" but is "trained" and competent to proceed without the assistance or guidance of an instructor.
In terms of customer service, this would be analogous to the "regular customer" who knows what he wants and how to get about getting it, and seeks to do so with minimum of hassle and interruption. Generally speaking, the most appropriate way for a vendor to interact with a customer in the unconscious competence phases is "hands off." They know what they are doing, are intent on doing it, and any interference comes at the risk of offending or annoying them.
However, some firms see this phase as an opportunity to upsell and cross-sell: to suggest that the customer who is intent on making a purchase either select a different item or add other items to their order. This is a delicate proposition, to be approached with care and reluctance, because there is a high chance (100% in fact) that the intrusion is unnecessary, and a very low chance that the interaction will have a positive effect on the consumer's behavior.
It is also a reason that firms should be reluctant to make changes to their processes - or where change is necessary, to understand the impact it will have on a customer and revisit the level of support that is provided. In effect, changing the order form for a product is jarring to a customer because he is proceeding on his unconscious competence. When he encounters a change, he is jolted back from unconsciousness into consciousness; and when he doesn't immediately understand the change, he is likewise jolted from competence to incompetence.
It's a bit distressing how often companies will inflict an unannounced change upon customers under the assumption that they will know what to do instinctively, or will soldier through it in any case. The potential for damage, and the need to proceed with extreme caution, should be evident, as reflected by the number of customers who change providers because the firm they had done business with for years changed the way they do business.
It seems to me that the level of discomfort that arises when a once-familiar procedure suddenly changes is likely higher than that which arises when a person is doing something for the first time and expects there to be uncertainty. But likely, this is getting off track.
Again, these are early notes and considerations and there are likely some flaws or holes in them.
Chiefly, it occurs to me that the learning process is most applicable to complex products and relationships. If you're selling soda pop out of a vending machine, the learning process isn't as complex - but I'd suggest that it is still present in a highly abbreviated form.
In any case, it's likely well worth considering in the context of customer experience - to consider the processes by which a customer is engaged and their mental state during each phase of engagement as a means to discover opportunities for improvement.
Tuesday, September 18, 2012
Building Respected Companies: Rethinking Business Leadership and the Purpose of the Firm - most authors who address corporate ethics seem to take the perspective that a corporation is the means to other ends, primarily as a milk-cow to provide funding to various social causes that are irrelevant and sometimes hostile to the interests of the firm itself or, at the opposite end of the spectrum, that the firm is merely a money mill to generate returns for the stockholders by any means possible. Canals took a different and surprisingly rational approach.
His principle thesis was that a business is an organization that is created with a purpose in mind, which is generally expressed as a mission to sell goods and services to the customers. Even if it does nothing more to demonstrate its social responsibility, a firm is creating a benefit for society, as the customers who purchase the goods or services of a firm derive some benefit, as evidenced by their willingness to pay for it.
In that way, a business is likened to most other organizations: a nonprofit or governmental organization delivers some benefit, usually a service than a good, to its beneficiaries - the main difference is that beneficiaries of a non-profit or government organization do not value the good with which they are provided enough to voluntarily pay for it - but they'll gladly enjoy the benefits if someone else is made to pay the bill. (Conceded: there's some argument that the beneficiaries "need" but cannot afford to pay - which is sometimes valid, though far less often than some purport.)
A second segment of society that is served by firms is its employees: in the salary they draw, the immediate non-cash benefits they receive, and the personal growth they derive from their profession. There's the sense that a firm can profit by exploiting its workers, but firms that take a long-range perspective must provide adequate compensation and opportunities for development to retain their personnel in a competitive environment - or else a competitor who sees their value will hire them away.
It's interesting that the importance of employees is considered at least to some extent by classical economists such as Adam Smith, who indicated that industry creates goods by leveraging labor and capital (they also separate "land," but it's always seemed an odd distinction, as land is just a kind of capital) - but the current-day perspective of companies seems to grant an inordinate amount of the reward (profit) to the suppliers of capital (investors) and undercompensate the suppliers of labor (employees). But I suppose that's just the effect of the present economic situation, where there is a glut of supply and a dearth of demand in the labor market. When the situation is reversed, and labor is in short supply, firms are brought to the reluctant admission that labor is a valuable input.
On the topic of shareholders, this is the third segment of society that companies serve, by providing a fair return on their investment, supplying the requisite capital without which the firm would not exist. Canals didn't explore the needs of this group in much detail, as firms already seem to recognize and over-emphasize the degree to which investors deserve to enjoy the financial rewards of the firm, and quite often support their interests to the detriment of other stakeholders whose claim to a share of the reward is just as valid.
But there is a significant point to be made about the nature of investment in the present age: it seems that many people still cling to the notion of investment being the realm of individuals who are already quite wealthy and were simply seeking to become even more wealthy, but participation in investing has become far more widespread: the vast majority of investment funds in these days comes not from a small handful of billionaires, but from the great multitude of middle-class workers who each have a small stake in pension plans and retirement accounts that, in aggregate, amount to trillions of dollars. This, itself, constitutes a problem because the individual with a few thousand dollars in a retirement fund is far more callus and indifferent to the firms in which he invests, and far more interested only in his financial returns, than the plutocrat who own a sufficiently large propotion of a firm to feel personal interest in and accountability for its behavior.
The last, and least important segment of society that companies service is consequently the one that is most often the very same that those who misunderstand ethics believe that the firm should primarily serve: the community at large. Canals's take is that most philanthropy by business is a dodge - a firm that conspicuously donates to charity is likened to a pimp who donates to the church: they give some small fraction of what they have extorted from others to charitable causes in order to appear to be magnanimous, and it's disappointing how readily the public falls for it.
That's not to say that companies have no interest in being charitable, just no moral obligation to provide financial support to organizations that are indifferent or hostile to their own interests. For a firm that operates in a given community to donate to educational establishments is well in line with its purpose - it creates more knowledgeable customers and more capable workers, some of who will buy from and work for the firm itself and contribute to its primarily social function: to render a good or service that delivers a benefit to its customers.
It's been a long meditation and has likely only scratched the surface of the book, but it's a worthwhile read and likely the most reasonable and rational approach to corporate ethics I've read in many years - much more to come on this topic, I expect.
Friday, September 14, 2012
I find it ironic that firms complain about commoditization while, at the same time, working very hard to achieve it. I'd like to give them the benefit of the doubt, to suggest that they do not recognize that the very things they seek to do in order to be innovative lead to commoditization, but the connection is so obvious that I can't accept that anyone would fail to recognize it.
Consider this: all the major firms in a given industry likely subscribe to the same sources for market research - which leads them to the same conclusions, which leads them to implement the same strategies. If a new study suggests that consumers show a strong preference for orange-scented cleaning products, every manufacturer is led to add the same scent to its product, and they all end up doing the same thing. None of them gains an advantage or establishes distinction.
It's likely true that firms can come to the same conclusion even by doing independent research. If firms all ask consumers the same question, the consumers should be expected to answer the question in the exact same way to any surveyor who asks. And if the samples are statistically representative of the population, even asking different groups of people the same question yields the same answer - and the results of the research lead firms in the same direction.
That is to say that not all instances of apparent imitation are directly imitative. Certainly, some of the firms (particularly the smaller and less innovative ones, and likely quite a few large firms who claim to be innovative) simply look to their competition and copy whatever they are doing, assuming it to be based on sound research. But even when a firm is large enough to do its own research and places a great deal of effort into being innovative, chances are that its competitors are doing the same research, coming to the same conclusions, and moving in the same direction even if they are wholly unaware of it.
In some instances, commoditization is aggressively pursued by adopting "industry standards" for a product. It may also be pursued by seeking to model existing operations after a pre-packaged process model: if two firms are both using Six Sigma and TQM, chances are their practices are the same, and their products are the same. The same can be said of using the same technology infrastructure products.
That may not always be significant: my sense is that when a system is applied to a business process that is not at the core of an operation, its impact on product may be incidental. If two firms that produce similar products both run their warehouse by the same logistics theory and use the exact same software to manage their inventory, it doesn't necessarily mean their products will become commoditized. Or if the accounting departments both use the same information technology system for counting the beans, it does not necessarily have an impact on product.
But then again, it cannot be entirely discounted: similarity of logistics may lead them to adopt the same packaging for their products, which carries through to the very design of the product itself (to accommodate the packaging requirements). Similarity of accounting systems may be even worse, as management decisions are informed by accounting data, and if the calculations and reports are identical, it homogenizes their perception of their operation as a whole.
When it comes to differentiation in the eyes of the customer, which is really where it counts in terms of whether a product is perceived as a commodity, firms should be extremely circumspect of the information, systems, and tools they are using. For example, two firms that use the exact same ecommerce infrastructure will be delivering a commoditized experience to the customers who use their site, in the same way that two firms who use the same molds and resins will manufacture products that are physically identical to one another.
This is a bit of a quandary: it certainly makes sense that a company should seek to implement the best practices, but the best practices are the same for every company in the same industry. As such, all companies are inexorably drawn to do the exact same things in the exact same ways as every other firm, commoditizing the product and drawing all industries toward commoditization and monopolization.
I likely need to do a bit more reading and research in this area - as it seems a quagmire without a clear solution, but a critical issue to corporate strategy and experience design.
Monday, September 10, 2012
It recently became clear to me that one of the people I've seen regularly in online forums related to customer experience is, to be blunt, a complete ass. That's a bit coarse, perhaps, but sometimes euphemisms fail to adequately express the degree to which a person is unpleasant, arrogant, obnoxious, etc.
Not that this is anything new - such individuals have been among the most active participants in online discussions since the days of USENET - and the problems are well known: the disinformation they spread damages the credibility of online sources of information, and the manner in which they interact with other participants brings conversation to a complete halt.
What does strike me as new, or at least worth remarking, is that this behavior is coming from someone who wants to be regarded as an expert in online customer experience. I don't expect there can be much debate over whether supporting a positive customer experience requires dealing with people (customers, specifically) in a polite and respectful manner. A firm that seeks to hire service providers would do well to screen candidates for having certain personality traits and qualities of character: being personal, having good manners, showing respect for others, and the like.
Nor do I think that the medium should make a difference. If anything, the professionals who design an online user experience must not only have good people skills, they must also practice those skills through the awkward and indirect channel of a computer interface, which limits the number of tools at their disposal.
The analogy that comes to mind is e-mail: it's far more difficult to interact with people via e-mail than in person because subtle cues such as tone of voice, expression, and gestures are not available to express yourself and gauge how the other person is reacting. I'm leery of people who blame the channel for the problem. When someone claims that "Bob's a nice guy but he comes across as a jerk in his emails" it's more likely that Bob is in fact a jerk, who has much more experience concealing his true nature in face-to-face conversation.
The same is true, I suspect, of customer service and user experience in the online channels: I don't expect that a person who is arrogant and offensive when engaged in a direct conversation, one to one, has the right personality and skills to determine what is acceptable in customer experience online. They can learn to refrain from being offensive (which is to say, how to refrain from being themselves), but they do not truly understand how to interact with other people in a non-offensive manner. It just isn't in their nature.
That's not to say that they are incapable of doing the job - just that they can't do it with any integrity. It's like the salesman who treats customers politely on the floor and then trash-talks them in the break room. It takes a lot of effort for him to restrain and conceal his true nature. Moreover, nobody can fully restrain themselves all the time. Sooner or later, their true colors will shine through in an inappropriate situation.
When a salesman slips up in a conversation with one customer, the dignity of one customer is affronted. When a user experience or customer service professional does so in designing an online interaction, he damages the brand or company's relationship with large numbers in a very short amount of time.
Ultimately, it seems to support the notion that certain personality types are a good fit for certain professions, whereas others are clearly not. When it comes to user experience and customer service, a practitioner needs to be good with people - and conversely, a person who is abrasive and offensive is obviously a misfit for this profession.
Thursday, September 6, 2012
I'm still pondering the topic of customer loyalty (to a retailer or a brand) and finding there's a lot of fundamental/foundational information to be considered on my way toward digging into retailer loyalty in the digital channel. In this instance, it's (become) a consideration of loyalty in and of itself, in particular distinguishing it from the notion of convenience.
It is arrogant and dangerous, to no small degree, to assume that because a customer regularly purchases the same item from the same retailer that this is an indication of customer loyalty. I expect that retailers aren't much concerned with why people buy regularly from them, and are thankful when they do - but the presumption of customer loyalty leaves the retailer in a precarious position when customers stop buying and the retailer has no idea why.
The "why" is, in most instances, that the customers who followed a behavior pattern that suggests loyalty were not in fact loyal, but were shopping a given retailer out of convenience. Convenience itself is a broad concept that entails the cost to the customer of obtaining the goods they wish to possess - it is generally taken to be the effort to get to a retailer (how far they need to drive, when the store is open), but price is also a factor in convenience (how much of their own labor is needed to obtain the money to pay the price).
But to drag myself back to topic: a customer who regularly purchases a given item at a given retailer out of convenience is not the same as a customer who purchases out of loyalty. The moment a more convenient option is offered - a closer store or a lower price - the convenience customer will change his habits and begin shopping at the competition. It is not that the retailer has lost the loyalty of that customer - but that he never really had it to begin with.
A loyal customer will continue to give his business to a retailer even if there is a more convenient option available. There is an emotional or intellectual attachment to shopping at that particular retailer even in the presence of more convenient options.
It may be a matter of esteem: a customer may take pride in buying a clothing item at Macy's that is available at a cheaper price at Wal-Mart, simply because they consider themselves to be a "Macy's Customer," which puts them in a higher social order (if only in their own minds) than the people who shop at Wal-Mart.
It may also be a matter of loyalty: there are still a significant number of customers (though often not significant enough to sustain a store) who shop for clothing in a "downtown" location, because the same retailer has served them all their lives, and their family for a few generations before - in spite of the fact that downtown is less convenient (distance, parking, etc.) than a suburban shopping mall that sells the same items.
A retailer who has loyal customers, those who are genuinely loyal and not merely convenience-repurchases, likely knows very well the reason his customers are loyal, and jealously defends those qualities of his operation that engender customer loyalty. Those retailers who claim to have loyalty because of behavior they do not understand often find themselves helpless to predict or react to changes in the competitive environment.
It seems to me that this may be another part of the puzzle - that retailers who assume loyalty to be dead are simply those that do not understand their customers - and it is their own ignorance, rather than the callousness of the buyers in a market, that is the source of their distress.
Sunday, September 2, 2012
Discussions around ecommerce still deliberate over the distinction between a customer's loyalty to a product brand (I will by my preferred brand from any retailer) and their loyalty to a retail brand (I will buy whatever brand my preferred retailer carries), and there still seems to be no clear answer. It seems that with so many people thinking about the topic, it would have been sorted by now ... but it seems to always end in a shrug, and the sense that it depends on the customer. Some people are this way, some people are that way, and there's nothing for it.
I've no easy answer - and my sense is it's not a dilemma that can have a universal solution: it depends on what the customer values, and not everyone values the same things, but it's still worthwhile to consider the issues as they may apply to each specific instance to have a better understanding of what might be suitable in a given situation ... given the strength of the brand, the strength of the retailer, and the factors that influence customers to decide, if only implicitly, which to grant their loyalty.
Mental Model: I just want a product, don't care what brand or where I buy it.
There are products for which most customers have no loyal to to brand or retailer. It's generally accepted that customers buy whatever brand is on offer from wherever it is offered, and it's generally a matter of convenience or price. There is some argument that people tend to buy the same brands from the same retailers - but the counterargument is that this is done without any consideration of brand, they happen to behave in a way that suggests loyalty, but no emotional or intellectual attachment exists.
A common example of this kind of product was once table salt - but in the present day gourmands have spun up the issue, there are many types and brands, and there are diehard salt nerds out there who have strong loyalty to a given brand ... so that doesn't work anymore. I expect the same is true for any product in the present environment.
With this in mind, it's necessary to focus on the customer rather than the product. For some customers, the brand of salt doesn't matter - they buy whatever is cheapest. not seeking out a specific brand, and do not plan a trip to a specific retailer to purchase the item.
This is not universal, but is likely true of most consumers, and marketers struggle over what to do with this sort of customer. Some see him as a good opportunity to create loyalty where none exists, others despair he is a customer in whom loyalty will not take root.
Product Over Retailer
Mental Model: I want a specific brand of product, and will buy it from whomever offers it (most conveniently or cheaply).
For other purchases, customers have a strong desire to obtain a specific brand of product, but are indifferent to the retailer from whom they obtain it. This is presumed to be the mentality of most customers for most product categories - though, again, it is not always so for all people and all products.
A common example of this kind of product is perfume. There are many possible examples, but loyalty is especially pronounced in items that are used close to the body or is tied to a person's identity or esteem - and "how I smell" is an area in which, in the US at least, people are particular to the point of being neurotic.
As such, the customer seeks out a specific product brand when a purchase is made. He will go to a retailer he knows to carry the brand, will not consider alternatives if the brand is temporarily out of stock, and will change his patterns to shop at a different retailer if he gets the sense the brand he wants is no longer carried.
The retail strategy in this instance is to stock the brand customers want, and where it is a common item, to offer it at a price below what other retailers charge if it is a destination item ... or perhaps, "as it is a destination item" in some shopping excursions.
Retailer Over Product
Mental Model: I want to go shopping at a specific store, and will buy whatever brand of product they offer.
Another category is the one in which a customer seeks to shop a specific retailer to see the items they have on offer. That is, when they have a need for a given kind of product, they go to a store to find it, and consider what is on offer there.
A common example of this kind of product is automotive tires. While some customers are loyal to brand (people who seek out a specific brand of tire), the general tendency remains that a customer will go to buy tires at a specific retailer, and make their selections from whatever brands are on offer, based on whatever item strikes their fancy.
As such, the customer goes to a specific destination, but does not generally seek out a specific brand. The fact that the store he usually goes to no longer stocks the brand of tire he purchased the last time is of no importance ... he will buy whatever brand is on offer.
The retailer is strongly empowered in this situation to drive decisions of the brands of merchandise he will offer, and has a great deal of flexibility in pricing his merchandise within a broad range of consumer tolerances. The store is the destination, not the item.
Mental Model: I go to a specific store and feel confused or disappointed if they don't carry the brand I want.
The last category is particularly troublesome for customers and retailers alike: the customer wishes to obtain a very specific brand of item at a very specific retailer.
A common example of this kind of product is clothing, specifically men's suits. The customer is habituated to going to a specific retailer for "clothes shopping" and, at the same time, has a very specific sense of the brand he wishes to purchase.
If the shop he frequents does not carry the brand he wants, there is some deliberation over whether to purchase a different brand or go to a different store. It is ultimately resolved one way or the other, but not without at least some level of angst.
There is also some question as to the degree of power that a retailer has in this situation: so long as he can stock the brand customers want, he has firm command over their loyalty but is in a weak negotiating position with his own suppliers.
Where is this going?
I had started out with the intention to contrast strategies for serving customers in the electronic channel, and instead ended up doing a "basic overview" piece on customer loyalty. And it's gone on quite long enough - so I'll change the title to some thing more generic and come back to the original notion when time and energy permit.