Monthly Archives: March 2010

Marketing Week: Customer Experience Master Class

On Wednesday I ran a customer experience master class for Marketing Week as part of the Customer Retention conference. With a colleague, we shared some thoughts with just over 10 senior marketeers during the one day workshop about why having a customer experience strategy is critical to services businesses today and introduced some models that they could put into practical use.

Although over ten years old now, I used the concept of progressing economic value introduced by Pine & Gilmore in their book (Experience Economy 1999) to explain why customer experience strategies can help businesses differentiate. For those unfamiliar with the concept it deals with the evolution from commodities to goods to services and then experiences with increased differentiation, premium pricing and closer alignment with customers needs as you move up the progression. The book uses a coffee example to illustrate the progression from commodity (bean) to goods (ground coffee/packaged coffee) to service (Cafe coffee) to experience (Starbucks coffee) and it easy to understand from this the increasing pricing and differentiation associated with each step.

The big challenge of course is getting from a service to an experience – an experience being something memorable for the right reasons; it is easiest to be remembered for delivering a poor service as the image from Passive Aggressive reveals:

We waited...

Most organisations seem to struggle with the balance between mass customisation and commoditisation of services. If you read my blog about Starbucks I alluded to this very problem. In their drive toward lower cost service delivery they have made decisions about the technology they employ that actually damages the customer experience (IMHO). They hoped to increase the interaction time between Barista and customer but in the process devalued some of the theatre.

The nature of the feedback shown in the photo links me nicely to the subject our guest speaker Guy Stephens spoke about which received a great deal of interest: using social media as part of a customer service strategy. Social media is a fairly instant feedback technology and is increasingly used by disgruntled customers to make their feelings known – perhaps not in as interesting a way as with the use of ketchup and mustard.

It was very interesting to hear about the issues big companies were facing when dealing with social media. In one example a member of staff who used social media in their private lives had decided to get involved on the Twitter feed to try and help customers or deal with the issues of disgruntled customers only to be told not to by PR and legal teams. Similarly there were stories of brand conflict and a lack of clarity about how the process would be managed.

There is clearly a great deal of confusion from big brands about how to deal with social media and of course the problem is not helped by the fact that most senior managers are (in general) poorly educated about social media not being from the “born digital” generation. Nevertheless, customers are using social media sites in their millions and are commenting and debating their experiences (good and bad) with brands all over the world.

Social Media of course is only one set of touch points that brands have with their customers. We ran an exercise at the event to identify different touch points and see if we could get anywhere near the 100 or more that one of our travel clients claim they have. We managed to get well over 50 before turning our attention to user journey mapping and the connections between the various touch points at our disposal.

Finally we discussed measurement strategy and the common errors that companies make. Once again I found that most organisations don’t have a clear measurement strategy and few of the people at the workshop had clear links between the measures and KPI’s they used on a daily basis and the business plan and objectives. Of course the solution is obvious and everyone knew the answer before I presented it but it is clear that in the cut and thrust of the day to day lives of a marketer it is often hard to address this key issue.

Delivering a differentiated customer experience didn’t feature as a strategic goal of any of the companies we met and yet during the afternoon’s practical sessions more than one described their organisations strategy as being to differentiate (rather than lowest cost or focus for those familiar with Porter) from their competition. All seemed to leave the workshop believing it is important but I worry about their ability to make anything actually happen given the silos that exist within organisations. Perhaps a major competitive shift will be the driving force but I think this is an incremental opportunity given the scale of the task.

It’s getting emotional

Last week we entertained the world’s press in our labs – OK a slight exaggeration, but with the might of CA’s PR department we did have over 40 people from various European media organisations including Portugal’s main TV channel and the UK’s FT. The reason they visited Foviance was to attend CA’s press launch of phase two of their web stress campaign which included the measurement of web stress using EEG – electroencephalography.

In parallel to this going on in our offices, it transpired that UX company Fhios had been acquired by One to One Interactive and would be joining their neurological marketing department. At the Insight show last summer Fhios presented the research they conducted into neuro-marketing and the presentation covered their findings, which like our own, implied a link but really called for more research in the area. Like Foviance, it would seem that they have carried out more work in the area.

It was only two years ago that neuro-marketing firm Neuroco was acquired by Neurofocus and in parallel there has been a number of other neuro-marketing hardware and service solutions entering the market from (mainly) US companies. Some provide a hardware / service solution using headsets that they send out to 100’s of participants at a time. 8 node versus 32 node data capture is a question that is starting to gain followers as well as the need for statistically significant sample sizes vs. qualitative depth studies.

Martin Lindstrom has talked about the cross over between the emotional psychology of why we buy for some time and his most recent book called “Buyology” (the truth and lies about why we buy) has become a best seller. The book describes what was learned through a 3 year project costing millions and using EEG and fMRI data capture to study what happens in peoples brains as they watch commercials and interact with brands. There are some really interesting findings in it and once again it raises the debate about emotional engagement and subconscious reactions to a new level.

I think we are on the cusp of something big and firmly believe that over the next 3 years neuro-marketing will grow in importance and become a recognised and essential tool in the marketers kit bag. To be able to measure emotional engagement and then design experiences or interactions with a mind toward how emotional engagement will be impacted is surely the holy grail of brand engagement. It offers firms like Foviance a potentially very interesting intersection between behavioural psychology, micro-economics (becoming know as behavioural economics), neuroscience and marketing.