The customer experience blog

Is your sales process undermining your customer experience?

Do you remember a decade or so ago when focus switched from 'getting' customers (selling) to keeping them? Sales-led organizations the world over were struck in particular by Fred Reichheld's book The Loyalty Effect (1996) with his bath analogy; that being sales-led without a retention strategy was trying to fill the bath while the plug was out.

It has become clear in recent years that the dislocation between over-promising through sales and marketing to win new customers, and the actual customer experience that comes after, is a major contributor to customer dissatisfaction, defection and cynicism.

Smart customers tend to see the sales process as one of manipulation. And, as the Swedish economist Kjell Nordstrom likes to say, "There are no more dumb customers any more."

The days of old style, hard sell sales practices are having to change as a result. Dixons, the UK high street electrical retailer, found out the hard way that incentivising its sales assistants to sell extended warranty policies at all costs is incompatible with building a brand that consumers trust. In the short-term, up to fifty per cent of the company's profits came from the sale of extended warranties. But, the practice saw a consumer backlash and Dixons no longer exists on the UK high street.

In the business to business world, hard-nosed sales cultures use the term 'bait and switch' to describe the practice of wheeling in one team to win a contract and then replacing them with a much more junior team when the contract is won and the work starts.

In both the B2C and B2B examples, above, customers are disappointed because they feel the sales process is manipulative, fundamentally dishonest and not operating in their interests. Not the reaction you want from your customers if you want to create positive word of mouth referral.

It doesn't matter what techniques you use to disguise your selling. Savvy customers are wise to all of them. "Everyone today does relationship selling. Everyone does consultative selling," argue Terry R. Bacon and David G. Pugh in their book The Behavioural Advantage. "The selling process itself has become commoditized."

It's time to recognize selling for what it has to become - the buying experience part of your customer experience; the introduction and induction to your organisztion for new customers.

A number of forward-looking organizations are re-inventing their selling process from the ground up. In coming blog posts I will take a look at how they are doing this. For now, as part of this introduction to our series of occasional posts on re-inventing selling, I'll leave you with the six key areas you need to think about:

1. How the sales experience can be redesigned so that it becomes an integral part of the customer experience and dramatizes the power of your brand
2. How sales people are hired and more particularly, the spec that is used in hiring them
3. How sales organizations are structured and managed
4. How the sales effort is measured and how sales people are rewarded
5. How senior management works with (or doesn't work with) the sales team
6. How the sales team is integrated with the rest of the organization, to ensure customers receive a continuous experience rather than a disjointed one

John Aves
Smith+co

How different would your organization be if you perceived customers and employees as owners? Employees as owners may not at first glance appear radical. Organizations use share ownership to engage employees by giving them a sense of ownership. But, this is a different form of ownership we are talking about here.

It's ten years since the publication of The Service Profit Chain, the book that arose out of the Harvard Business School research of James Heskett, Earl Sasser and colleagues into the connection between employee satisfaction, customer satisfaction and profit.

Now known in its latest incarnation as The Value Profit Chain, the Harvard work essentially showed that happy employees lead to happy customers who come back repeatedly, becoming loyal and generating higher profits.

The US retailer Sears was one of the Harvard case studies that showed how an increase in employee satisfaction acts as a precursor to a measurable increase in customer satisfaction and then in profit. As we all know, the link between satisfaction and profit is a tenuous one, however, only becoming noticeable at highly satisfied levels.

We can translate the findings into customer experience terms: you need to create a compelling employee experience before your employees can create a compelling customer experience. Sir John Sainsbury, of the Sainsbury supermarket chain family, neatly summed up the learning point in five short words last century, decades before the Service Profit Chain work at Harvard gave us the academic backing to support his words:

"They serve like we lead", he said.

There's more on the ten year anniversary of the book over on the Harvard Business School website in a Q & A with Jim Heskett. In the interview, Heskett explains his latest ideas about customers and employees as owners. He also mentions our own Joe Wheeler, smith+co senior partner. Joe has great depth of knowledge and experience in how to put the Service Profit Chain to work, and we apply that to our customer experience work with client companies.

Posted by
Shaun Smith
On behalf of
Smith+co

Andy Milligan writes...

CEO tenure has increased on average in most parts of the world. But, the number of CEOs who lose their job because of poor performance has also increased.

Look at the CEOs who stay longest in the UK - Sir Terry Leahy, for example - and you find those who are most obsessively focussed on the customer. So, if you are having trouble convincing the CEO of the centrality of the customer experience to your organization's success, try focussing them on the centrality of the customer experience to their own job tenure.

In 1995, one in eight departing CEOs around the world was forced from office. In 2006, nearly one in three left involuntarily, according to Booz Allen Hamilton's annual surveys of CEO tenure (their figures for 2007 are due out later this year).

The reputation of the organization's brand or brands is the one thing that ties together the different stakeholders that the CEO has to please in order to stay in post - customers, employees, investors, the community, environmentalists and opinion formers. And the customer experience, which is where you deliver on your brand promise, is where that reputation stands or falls.

For many years, brands were the playthings of marketing departments and responsibility for them stopped there. However, intangible assets, including brands and reputation, now make up around 75% of the value of listed companies, clearly making them far too important to be left to the marketing department alone. The CEO needs to have his or her eyes on this particular prize; their own position depends on it.

As Sir Stuart Hampson, the former chairman of the John Lewis Partnership, one of the UK's great stakeholder businesses, said in our book Uncommon Practice:

"Focus on the sources of profits (customers), not on the profits themselves."

It's a message every CEO should take to heart. For their own good. The Customer Experience, then, should be at the top of the CEO's agenda.

Posted by
Andy Milligan
On behalf of
Smith+co

I contend that just being 'very good' is no longer enough to stand out in the customer's mind. In an age of over-supply, you have to be different, you have to stop playing it safe; in short, you have to be bold if you are to be memorable.

There is a great example of doing just this: the Six Senses group of resorts and their award winning property in the Maldives, called Soneva Fushi.

I visited the resort and interviewed the Chairman Sonu Shivdasani as well as the General Manager and front-line staff. The Six Senses proposition is 'Intelligent Luxury'. Sonu said that the concept came from asking the question "What can we give guests that they can't get at home?" as opposed to the more usual luxury hotel question "What do our guests expect or how do we exceed what they have at home?"

Click here to hear Sonu define 'Intelligent Luxury'- you can even hear the waves and wind in the background as I interviewed him in the beach side restaurant.

For example, you fly in by seaplane and your own 'Man Friday' meets you. The first thing he does after introducing himself is to offer a bag emblazoned with the words 'No news, no shoes' and he asks you to put your shoes in the bag.

You don't wear them again for the duration of your stay because you walk everywhere with sand between your toes-even the restaurants- rather than the usual marble floors favoured by up-market hotels. Other 'typical' elements of a luxury hotel stay are also not included. They do not provide CNN or newspapers delivered to your room, for example, unless you insist on it and arrange it beforehand.

At the core of the company's philosophy is their Six Senses cycle whereby they are explicit about giving priority to their 'hosts' (front-line employees) on the basis that they will then create a great experience for guests.



As you may imagine, Sonu and his colleagues are not your typical stuffy hoteliers as you can see from the photograph. In fact they refer to themselves as the 'core' rather than the Management or Executive team.

An example of their being bold? You pay $1500 a night and yet they ask you to take your empty plastic bottles and other rubbish home with you to minimize the environmental impact on the island. Another is that the tables they provide on the beach in front of your very expensive room are old wooden cable drums turned on their side and left to bleach in the sun.

So, just how bold is your business? Take part in my short online survey, which is part of the research for my new book with my co-author Andy Milligan. All participants receive a summary of the survey findings. Click here to take the Bold Business survey.

Shaun Smith
Smith+co

There's increasing evidence that going for the extremes - being bold - gains more attention and loyalty from customers. In over-crowded markets, bold stands out. If you want 'fans' instead of customers, then to gain that kind of extreme reaction you need to provoke strong emotion. And for that, you need to be bold, not bland.

Richard Branson, who will be with us at European Customer Management World next month, knows all about being bold. His latest bold venture is to take the brand literally out of this world. He has teamed up with aviation designer and inventor of 'Spaceship One', Burt Rutan, to launch Virgin Galactic.

If all goes to plan anyone with 100,000 UK pounds (US $200,000) to spare can fly Virgin Galactic into space (or you can use your Virgin frequent flyer miles!)

Virgin Galactic's spaceport in the New Mexico desert, opening for business in 2010

So, just how bold is your business? Take part in my short online survey, which is part of the research for my new book with my co-author Andy Milligan, called Bold Business. All participants receive a summary of the survey findings. Click here to take the Bold Business survey.

Shaun Smith
Smith+co

I will be running a Case Study & Q & A in The Customer Experience Summit, Monday 12th May, with Waterstone's Director David Rowntree, and will be chairing the Brand & Marketing Innovation Track of ECMW 2008 on Wednesday 14th May.

More detail on this link: European Customer Management World

Robert Stephens, founder of The Geek Squad, the IT support company that changed the way consumer technology support is delivered, has a great quote on how a distinctive customer experience makes marketing spend almost unnecessary in some cases:

Marketing is a tax you pay for being unremarkable.

I love that. Robert takes a distinctive approach to marketing. I remember once interviewing him whilst he was driving his car, for one of our books. I kept hearing a swishing sound. I asked what it was. Robert answered it was cars overtaking him. Not him overtaking other cars. Other cars overtaking his Geek Squad-branded vehicle. I apologised if I was slowing him up and he laughed and said it was his policy.

Robert had worked out that if he drove at a couple of miles under the speed limit, three times as many cars would see the Geek Squad branding on his car as they passed than if he kept up with the traffic.

The Geek Squad is like living theatre or, as Robert calls his band of technology fixers, with their Dragnet-style faux cop cars, FBI-style badges and NASA Geek chic short-sleeved shirts, white socks and clip on ties, "a living comic book".

Now, Robert Stephens is a man who knows how to create a distinctive customer experience and build the whole business upon it. He's recently gone into partnership with one of our clients, Carphone Warehouse, to bring the Geeks to the UK, having gone from strength to strength with his alliance with Best Buy in the US.
We'll feature more of The Geek Squad in this blog in future, and the lessons you can learn from them in building a customer experience that makes you stand out from your commodity-like competitors. In the meantime, here are a couple of Geeks with a fan of theirs - Microsoft CEO Steve Ballmer:
Posted by: Shaun Smith for smith+co

IHG (Intercontinental Hotels Group) announced recently that they are deepening the design of their customer experience by creating signature smells for their hotels as part of their guest experience.

This makes a lot of sense. The sense of smell accounts for 70 per cent of what our emotional recall is based on, according to some researchers.

So, do you design the smell and other senses such as the sound of your customer experience? Most organizations don't. BMW does. They design in that 'new car smell' on purpose because research says their customers like it. They tune the exhaust to 'sound like a BMW'. They understand that the 'ultimate driving experience' is one that engages all the senses.

Kjell Nordstrom, the economist, recently explained how Chris Bangle, the BMW design guru, took him on a tour of BMW's 'door room' - a giant hangar full of car doors mounted on rigs, with engineers all over the place slamming the doors shut and recording the sounds of the doors. It's how they get that satisfying and reassuring BMW 'thunk' sound as the car door closes.

Designing the 'sound' of your experience is a concept most organisations don't even address because even the word 'design' has visual origins, so excludes sound. But, here's an example of what it can achieve: At Glasgow airport they play natural, ambient sounds (birds singing, plus soothing chillout music underneath it) over the loudspeakers to relax travellers. Sales in the airport shops went up 10%.(No, it wasn't birdseed...)

So, smell and sound are part of your customer experience. If you don't design them in, you leave them to chance. But we know that the biggest impact on how we feel about an experience is the behaviour of the people that deal with us and yet that is often overlooked because it is intangible. In our book See, Feel, Think, Do, we analyse how you need to take into account the senses, how your customers feel and indeed your own gut instinct when running your organisation.

smith+co We recently worked with a global hotel group on creating the desired emotional experience for guests, as part of a major brand refresh exercise. Leading organisations are increasingly realising that the customer experience is integral to the brand and must be 'engineered' not just left to the front-line to figure out for themselves. Do contact us if this is the kind of help you need in developing your own customer experience.

Posted by: Shaun Smith for smith+co