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Apply a Little Human WD-40 to your Customer Friction Problems

Wednesday, October 02, 2019

 

A good friend and colleague, Anne Bowman, commented on a recent article saying, “We need to create human versions of WD-40” to lubricate away the friction between our company and our customers.

Friction ruins nearly every mating surface, from metal, plastic, and even stones in a river blasted by water over time. WD-40 is often used to lubricate and protect surfaces from moisture which, on metal, can cause friction-inducing rust.

Friction between you and your customers can ruin the relationship no matter how invested you both are in working together. Friction in business processes creates no intrinsic value for customers. If every customer interaction is wrought with friction, bureaucracy, complexity, or wasted time, there can never be real loyalty and certainly not high lifetime value.

What is your WD-40? How can you reduce customer friction or effort and become Easy to Do Business With?

During the past year, Jeb Dasteel, former chief customer officer of Oracle, and I have been interviewing successful CMOs, CDOs, CCOs, and other customer strategy executives to learn what works in reducing friction at the customer interface.

Based on our experiences and interviews, there are a handful of critical capabilities that companies need to deploy to truly become easy to do business with.

The first capability is a strong Customer Advocacy  function. This must effectively and regularly gather the voice of the customer (VOC) with a special emphasis on high-touch assessments of top customers, in real-time. As well, this function must have the ability to determine both the customer and business impact of this feedback. Like peeling an onion, becoming easier to do business with is a process that requires us to distill and prioritize key themes for systemic resolution, progressively tackling issues of increasing difficulty. Strong customer advocacy also requires a strong and steady hand in orchestrating the customer care function across channels and lines of business, as well as an aggressive process for issue escalation and resolution.

Another capability is the Roadmap & Strategy  function. Because customer executives typically don’t own all customer-impacting processes, Ease of Doing Business demands the ability to influence the organization using customer data and business impact to prioritize friction reduction efforts. One of the critical capabilities within the strategy function is the development of leading and trailing indicators that establish the guidewires for the entire organization as focus is applied to driving change, measuring incremental progress in reduction of friction, celebrating successes, and making the inevitable course corrections.

Successful Ease of Doing Business initiatives require a strong Orchestration & Engagement function to drive service recovery, account management, engagement, and customer success processes. Strong customer engagement enables friction hotspots to be easily identified and validated through VOC and advisory councils, and solutions are best tested directly with those customers directly affected.

Perhaps the most important capability in reducing friction and driving Ease of Doing Business is the Analysis & Insights  function. Altogether too often, friction isn’t noticed until the relationship is frayed so badly a rescue is very costly or damaged beyond repair and the customer has left. Strong customer measurements, analytics, and insights are critical.

Distilling a single, comprehensive set of metrics that presents an overall view of Ease of Doing Business is hard work. But the payoff is enormous. In our interviews with CMOs, CCOs, and other customer strategy executives, we’ve found that many are measuring NPS, CSAT, reading verbatims, or polling sales teams, etc. to back into identifying processes that might be adversely impacting Ease of Doing Business or customer effort. However, very few are directly measuring this effectively.

We recommend creating an overall Ease of Doing Business metric that is rolled up from other measures, and a transactional Customer Effort Score that can be surveyed after specific interactions.

The last capability we’ll mention is Employee Engagement & Organizational Change. The most successful customer executives are changing their game by incorporating the Ease of Doing Business and customer effort metrics into employee MBOs. And they are engaging employees across the business in cross-functional teams to fix the biggest issues.

How can you leverage these capabilities to become the human equivalent of WD-40 and not only insulate customers from the biggest sources of friction, but remove them altogether?

What are YOU doing to reduce customer friction? Share your examples in the comment section below!

If you want help..

If you’d like assistance in developing these and additional capabilities, we’ve created an  Ease of Doing Business Accelerator, a 1.5-day workshop designed for senior executives from marketing, customer care, services, other critical customer-facing roles, AND their cross-functional teams. It enables you to work on real customer strategy challenges & opportunities for you plus 3-4 members of your cross-functional team.

You’ll walk away with a clear definition of Ease of Doing Business/effort drivers, an explicit linkage of drivers to operational and financial metrics important to your CEO, and a detailed plan to resolve the highest priority Ease of Doing Business obstacles.

You can attend a public accelerator and benefit from cross-pollination with other non-competing companies or you can bring it in-house to work exclusively on your own strategies.

If you’d like to learn more or join us at the accelerator, please select a  convenient time for a brief call.

 

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Categories: Customer Effort | Ease of Doing Business

Ease of Doing Business: Do You Know What’s Driving Your Customers Away?

Monday, September 23, 2019

 

 

Ease of Doing Business: There is quite a lot written about this at the macroeconomic level. The World Bank measures Ease of Doing Business for 190 countries, based on detailed characteristics including how hard it is to start a new business, labor market regulations, dealing with construction permits, getting electricity, registering property, getting credit, trading across borders, paying taxes, and enforcing contracts. This follows the whole lifecycle of a business in each of these countries:

Source: World Bank “Doing Business 2019” Report, 16thEdition, The World Bank Group

It struck us when we looked at this that there are undeniable parallels here to the individual firm and how we look at ease of doing business at the microeconomic level—from the firm perspective and how it relates to the firm’s customers. Starting a business roughly equates to initiating the relationshipbetween buyer and seller. Getting a location translates to establishing the basic infrastructurefor doing business together (how the goods or services will flow). Accessing finance means establishing commercial terms and putting contracts in place. Dealing with day-to-day operations is pretty much just like it sounds: it’s all about transactions and interactions. Lastly, operating in a secure business environment is about dealing with issues and assuring business continuity.

Let’s look at the typical Ease of Doing Business drivers and organize them this same way:

Time and again, as Jeb and I have spoken to or worked with clients, we see these same drivers. In Jeb's experience as chief customer officer at Oracle for 11 years, when he made big improvements in contracting, relationship management (specifically account management), and issue resolution, Oracle made a substantial difference for its customers. Meaning, those tend to be the big levers from a customer perspective.

While we do see a high degree of consistency in what impacts customers, there’s every possibility we are missing something. We’d like your input on what you are experiencing in this one-question survey. Are there Ease of Doing Business drivers we’ve missed in the above list? How would YOU prioritize these? Which ones have the greatest customer impact?

These drivers are the center of our methodology in working with organizations to make them easier to do business with. We’ve worked with and interviewed scores of executives who’ve asked for help in becoming easier to do business with—so we’ve created an Ease of Doing Business Accelerator for top executives and 3-4 members of your cross-functional team to create a specific action plan for YOUR challenges. Join our upcoming session on November 13-14 in Seattle, where we will:

  • Define and prioritize ease of doing business challenges
  • Link each of the Ease of Doing Business drivers to the operational and financial metrics most essential to your CEO
  • Develop an action plan: specific initiatives to address the top priority Ease of Doing Business challenges
  • Create a process for root cause/corrective actions to address Ease of Doing Business needs by customer segment on an ongoing basis

The World Bank's objective is to "drive inclusive, sustainable economic growth.” While we of course want the same thing, our goals are a little simpler—and arguably more achievable. We want to help you understand your Ease of Doing Business drivers and create an action plan that will create greater value for your customers and for you.

We hope to see you in November!

Curtis Bingham, founder and CEO, CCO Council

Jeb Dasteel, former CCO, Oracle

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Categories: Customer Effort | Customer Engagement | Customer Retention | Ease of Doing Business

Ease of Doing Business: Are you Ignoring Customers?

Friday, September 13, 2019

For the past year, Jeb Dasteel, former chief customer officer of Oracle, and I have been interviewing and surveying top executives, asking them how much they have reduced effort, or improved Ease of Doing Business for their customers. And we’ve asked executives at companies who consume products and services how much easier to do business with their top suppliers have become.

A comparison of the results is shocking.

52% of sellers admitted they had reduced hardly any or no effort at all in the past year. Which is certainly alarming, given the massive investments in CX improvements and digital transformation.

The remaining 48% of sellers said they’ve eliminated a moderate amount of effort. Sounds a lot more promising, right?

Buyers strongly disagree. 90% say their top 3 suppliers have eliminated hardly any or no effort at all in the past year.

It gets worse.

First, a little context. In our previous article, we wrote that improving Ease of Doing Business is the single most important thing that organizations need to work on to create value not only for their customers but also for their own business.

The most critical component of Ease of Doing Business is reducing customer effort, or the burden placed on your customer that creates no intrinsic value for them but is an inescapable aspect of how they’re forced to interact with you.

Gartner states that reducing customer effort can reduce costs by 37% and induce customers to spend 88% more. In fact, 96% of customers with high-effort experiences are disloyal, compared to only 9% with a low-effort experience.

Effort is a gating factor preventing loyalty gains. High effort experiences have to be remediated before customers can become loyal.

Clearly, focusing on reducing customer effort in order to improve Ease of Doing Business yields huge dividends in terms of loyalty, profits, and revenue.

In our many discussions with executives and our 2019 CCO Council meeting, it is clear that CX is often nebulous. How many employees know exactly what constitutes a great experience? Effort, however, is intuitive. Employees often know exactly how to make it easy for customers to do business with us.

Ease of Doing Business is more concrete and resonates more strongly with the CEOs, COOs, and other c-suite executives we’ve talked with, as compared to CX.

The Process

To gather these data, we targeted top-level executives typically of B2B companies offering a product or service (sellers), and executives who purchase products/services from B2B sellers (buyers). We interviewed many CMOs, chief customer officers, and other customer strategy executives. We invited our customers, contacts, and LinkedIn colleagues to participate in the survey. (Note: The survey is ongoing. We would love to have you take three minutes to contribute to it. If you do contribute, please don’t let these conclusions sway your answers!)

We asked sellers, “How much customer effort has been eliminated today versus a year ago? In other words, how much easier have you made it to do business with you today versus a year ago?”

We asked buyers, “How much customer effort has been eliminated on average by your top 3 most strategic providers today versus a year ago? In other words, how much easier have they made it for you to do business with them today versus a year ago?”

We also asked both sellers and buyers to rank order a list of 10 of the most common drivers of Ease of Doing Business from most to least importance.

How Much Easier are you to do Business With?

Effort-SellersA handful of sellers were rather honest: they acknowledged they had eliminated no effort at all during the past year. Based on our experiences, we wouldn’t have been surprised if respondents had said it had actually gotten worse. We’ve seen so many initiatives launched that have poor consequences for customers because companies sought operational efficiency without considering the net impact on their customers.

Forty percent of respondents said they have eliminated hardly any effort.

Forty-eight percent of sellers said they had eliminated a moderate amount of effort and have become easier to do business with. This one is important: hold this thought.

Interestingly (and sadly), nobody said they had eliminated a great deal of effort.

Effort-BuyerWhen we asked buyers the same questions, we were surprised. Buyers told a very different story than the sellers. In sharp contrast, 90% of buyers said their top 3 most strategic providers have eliminated hardly any or no effort at all.

Thankfully nobody said effort has actually increased.

What does this tell us about the massive investments in CX improvements, digital transformation, omni-channel integration, and more? Were they wasted? Or overwhelmed by high-effort experiences? It is certainly possible that the innovations of a handful of companies such as Uber, Amazon, and others are increasing the expectations of all customers everywhere, making it impossible to “finish” Ease of Doing Business improvements. But that doesn’t explain these results.

Net, there is a significant disconnect between buyer and seller perspective on how easy they are to do business with. Sellers aren’t listening to customers, or they aren’t asking the right questions. And they certainly aren’t keeping up with a rapidly changing set of industry expectations.

What are the Biggest Drivers of Ease of Doing Business?

We asked sellers to rank order 10 of the most common drivers of customer effort that they believe have the greatest impact on their customers (1 being most impactful and 10 the least impactful).

Drivers-SellersIf you examine the top 5, do they make sense to you? If you’re like most, you’d probably tend to agree that these should be the highest priority.

It makes sense that customer onboarding should be #1, especially for a SaaS or other product/service company with a complex process for adoption and value realization. Streamlining interactions so customers aren’t calling repeatedly or multiple people aren’t unnecessarily involved makes absolute sense. And of course, we want to resolve customer issues, ideally without escalation.

We asked buyers essentially the same question and were quite surprised to find that there is absolutely no overlap in the top three most critical priorities between sellers and buyers. Customer on-boarding, the highest priority for sellers, is fifth for buyers. The highest buyer priority, “Better ways to collaborate”, is the seventh priority for sellers.Drivers-Buyers

Would you have ever guessed at this disparity?

The disparity in the drivers of Ease of Doing Business results in a significant waste of resources.  An executive for an agency operating a government-funded passenger railway said, “We’re undergoing a modernization effort. Engineers want to add WiFi in the rail cars and improved online ticketing. But we can’t even effectively communicate with passengers that the train is delayed! We have to fix the core system before we start examining engineering marvels!” 

How you do YOU know that you’re solving the problems that customers actually care about?  If you were to ask your top customers these same questions, would they be in perfect alignment?

Conclusion

The survey results match Jeb’s 20-year experience at Oracle, and Curtis’ experience in working with hundreds of customer strategy executives.

As customer strategy executives, we need to figure out how to become easier to do business with. And we need to ensure we’re anchored in and guided by our customers’ priorities.

We need to understand the customer’s drivers. We need to have a formal Ease of Doing Business metric we can baseline and benchmark against every year. We need to ensure the whole company is engaged in making it easier for customers to do business with us—not just in the call center, but throughout the entire customer lifecycle.

We’ve created an Ease of Doing Business Accelerator, a 1.5-day workshop designed for senior executives from marketing, customer care, services, other critical customer-facing roles, AND their cross-functional teams. It enables you to work on real customer strategy challenges & opportunities for you plus 3-4 members of your cross-functional team. You’ll walk away with a clear definition of Ease of Doing Business/effort drivers, an explicit linkage of drivers to operational and financial metrics important to your CEO, and a detailed plan to resolve the highest priority Ease of Doing Business obstacles.

If you’d like to learn more or join us at the accelerator, please select a convenient time to talk further on a brief call.

 

 Curtis-headshot  Jeb-headshot

Curtis Bingham

Founder & CEO, Chief Customer Officer Council

Jeb Dasteel

Former chief customer officer, Oracle

 

 

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Categories: Chief Customer Officer | Customer Effort | Ease of Doing Business

Improve Ease of Doing Business

Thursday, September 05, 2019

It seems obvious, but why make it a top priority? Because time and again we see that ease of doing business is the single most important thing that organizations need to work on to create value for their customers, and in turn, return value to their own enterprise.

Ease of doing business is important for everybody we work with. But what does that really mean? For our customers, it means making transactions simpler and engagement more efficient—taking effort out of interactions and getting more value out of the relationship. It’s about removing all the unnecessary friction. It’s also about efficiently managing relationships and fostering partnerships that extend beyond transactions. For our employees, ease of doing business means creating process efficiencies that allow for more time on real value-add activities and focusing on customer interactions that really matter. For our business partners, it’s all about being a frictionless channel to market that benefits both partners and the end customer.

Customer effort is a critical element—even THE critical element—of ease of doing business. We’ve already written about it at some length, talking about how important customer effort is as a leading indicator of successful Customer Performance and brand advocacy. Creating and sustaining ease of doing business is indeed very much about eliminating customer effort: removing friction from all interactions. It is also about building relationships and processes that transcend those interactions and giving new purpose to them—the systematic creation of value for both parties.

Over the next six weeks, we will be posting a series of blogs discussing various aspects of ease of doing business. Next week: The great divide between buyer and seller perceptions of ease of doing business. Spoiler alert: What you think is probably all wrong.

If you’d like to learn how to become easier to do business with, check out the workshop we are offering starting in November: The Ease of Doing Business Accelerator.

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Categories: Customer Effort | Ease of Doing Business

Stop Measuring Customer Loyalty; Start Measuring Customer Effort

Monday, May 27, 2019

Gartner says that reducing customer effort can reduce costs by 37% and induce customers to spend 88% more.

How many of you are focused on achieving these kinds of business results?

As a B2B seller, how much of a priority is reducing your customers’ effort and making it easier to do business with?

As a B2B buyer, how important is it that your suppliers reduce your effort to purchase from them?

We would love to know via a short survey how you’re prioritizing the reduction of customer effort. We’re happy to share a summary of the results to all who participate.

Why is this important? 

We (Jeb Dasteel and Curtis Bingham, doing independent research) have come to the realization that customer loyalty is simply the wrong thing to be measuring . It is increasingly very hard to correlate loyalty metrics with business results . It doesn’t measure actual customer behavior—and therefore it is not a true predictor of desired outcomes.

And even more important, loyalty is tenuous at best if the customer effort, or burden placed on your customers, creates no intrinsic value for them. If every customer interaction is pure friction, bureaucracy, process, or wasted time, there can never be real loyalty.

Effective predictors require a direct line of sight to business outcomes: greater revenue, decreased costs, or risks mitigated. We have seen many customer executives fail in their ability to demonstrate tangible business impact on the enterprise. This is a partial explanation as to why the average tenure of the chief customer officer (CCO) is only 27 months, and the CMO is only slightly better.

What should you be measuring instead?

In numerous interviews conducted over the past six months with extremely successful chief marketing officers and chief customer officers, we’ve developed some provocative new customer strategies anchored by seven leading indicators of profit/revenue growth —and best practices-oriented programs to move the needle for each that you can use to create real value for your CEO and your business.

Customer Effort is our leading indicator #1 . It is crucially important to your customer strategy. Reducing customer effort will positively give you stronger top-line and bottom-line results than yesterday’s focus on customer loyalty metrics.

We are hoping to even better understand how leading companies are prioritizing reducing customer effort and would love your insight. Can you take three minutes and participate in this survey

Thank you!

Curtis Bingham

Founder & CEO, Chief Customer Officer Council

Jeb Dasteel

Chief Customer Officer, Oracle

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Why go digital? Because it is all about the Value of Customer Engagement

Thursday, November 02, 2017

Customers with the best experience generate 140% more revenue. Digital transformation enables greater customer engagement, and therefore greater revenue.

What is the business value of an improved customer experience? CEOs have never responded well when chief customer officers (CCOs) say “Trust me, this is the right thing to do.” In fact, the average tenure of a CCO is only 27 months (recent CCO Council research). Why is this so low? One reason is that some customer executives struggle to demonstrate quantifiable ROI for customer initiatives. When the CEO and CFO are making priority decisions they simply can’t compare the returns for investing in CX improvements with hiring another salesperson.  Or worse, when the company hits a revenue road bump, the CCO’s initiatives and sometimes even the CCO herself are the first to be cut because their value cannot be quantified.

According to research published in HBR by Medallia, customers with the highest CX scores generate 140% more revenue than those with the lowest.

Medallia examined in depth two companies, one transactional and one subscription based. Transactional companies typically measure return frequency and average spend per visit. Subscription-based companies typically measure duration of repeat business, typically through retention, cross-sell, and upsell. They examined customer feedback and experience scores at a point in time, and then actual behavior for the subsequent year. This is important, as one of the downfalls of NPS measurement is that it measures nebulous intent and not actual behavior.

After controlling for other factors that drive repeat purchases such as affinity or natural consumption cycles, Medallia found a strong correlation between CX and revenue. Revenue generated by each customer increased significantly with higher CX scores. The customers with the best past experiences generated 140% greater revenue than customers with the worst past experiences.

For the subscription business, customers having the poorest experience stood only a 43% chance of being a member a year later, and were only likely to remain a member for a little over a year. Conversely, those with the best experiences were 74% likely to remain a member a year later, and were likely to remain a member for six years.

Done right, digital transformation promises improved customer engagement, a better experience doing so, and decreased costs to serve. And that’s a compelling argument.

How are you demonstrating the ROI of your customer initiatives and CX programs to your CEO?

P.S. Next question: Would it be valuable to have a discussion about where you need to go next in your digital transformation?

I've created a comprehensive digital assessment that benchmarks against the world's leading companies in six critical dimensions and gives you a prioritized roadmap going forward. I've partnered with Bob Taylor, former CCO of Samsung SDS and present CDO of from.digital, a digital transformation agency to bring this to you.

If you'd like to discuss, please call me at 978-226-8675 or email curtis@ccocouncil.org.


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Categories: Chief Customer Officer | Customer Centricity | Customer Engagement | Customer Insight | Customer Loyalty | Customer Retention