Design and Measure the REAL Customer Experience to Win

Customer Experience, Operational Excellence and Innovation

Strategies and Techniques for Change Agents, Strategists, and Innovators

If you don’t appreciate your customers, someone else will. —Jason Langella

I travel for both business and personal purposes, averaging a trip a week. When traveling, I really appreciate “ease.” Priority boarding, personalized communications, notifications, and quiet spaces. Small delights leave an impression and create loyal customers.

What’s the opposite of “ease”—operational and customer “dis-ease”. Also known as friction, dis-ease is all the minor and not-so-minor inconveniences we force on our customers. Late and canceled flights are the most brutal type of friction in travel; mobile apps that don’t enable full functionality; the inability to quickly find the electronic receipt to submit. The list in travel is long but it happens in every industry.

A large healthcare provider retained me for a keynote which included 1,500 signed copies of The Amazon Way. I ordered the books from CreateSpace (easy!), signed them (hard on my hand!), and then I needed fifteen boxes shipped to the event from my house.

I was using a large national carrier and soon experienced a prominent blind spot for them. I could not schedule a home pickup for this many boxes using their website. I called customer support, sat on the line for 10 minutes, and was told I would need to be home for a pickup “anytime between 8 a.m. and 5 p.m.” Really?

Who runs their life like that? Even if I were at home for an entire day, I would never be ready at any moment to serve their pickup driver. Instead, I made three trips to the carrier’s local office to drop off the books. Yet another case of customer experience dis-ease.

THE EASY BUTTON

What most of us want is an “easy” button. What does it do? The easy button allows for business on my terms, through the channel of my choice, in a frictionless manner. It is connected across all channels, with flexibility, proactive updates, and demonstrated respect for my most precious asset, time.

The easy button means guarantees, outcomes, and ironclad service-level agreements, as opposed to my buying a product or service and just hoping it delivers the intended result.

Many organizations do an excellent job at this. Netflix seamlessly streams the content you want with a single push of a button. Dropbox and WeTransfer make sending huge files a snap. Yet for companies like these, the challenge is continuing to enable new customer experiences and shooting for perfection in their operations, affecting customer experience.

I recently dealt with a leading financial services organization that made me print, sign, and fax in a document instead of enabling an electronic signature. I didn’t even know fax machines still existed.

Ordering an item online, having it delivered to your house, and being unable to return it to their store. Being told by the airline ticket counter, “The system seems always to be this slow on Fridays.” All examples of companies without customer experience integration and the easy button.

As Jello Biafra, a punk rock musician, once said, “Give me convenience or give me death.” Once a punk rock anthem, now it’s my life’s anthem. It’s true whether you like it or not. The modern customer is not going to put up with customer experience dis-ease.

In this frictionless world, customers feel thousands of cuts and, finally, just quit.

We’ve all experienced too many great customer experiences to be satisfied with old-school and mediocre experiences. We sometimes settle for them because we have to, but we aren’t delighted by the experience. Most organizations must rethink, retool, and significantly upgrade the customer experience. And we ALL need to measure it.

THE iPHONE RUINED US ALL

In my estimation, nothing has dramatically changed customer expectations as much as the iPhone. It is “life’s remote control.” We want an app for everything, with the implicit promise that the app is going to be modern, intuitive, fast, easily procured through iTunes, secure, and trustworthy. When getting a new iPhone, the setup and transfer experience is elegant — not a pain.

Any product that needs a manual to work is broken — Elon Musk

We want these attributes now for everything in life, including B2B experiences. While many do not hit this bar, that doesn’t change the fact that our expectations are calibrated to a great mobile and holistic experience. And what is the direct result of unrealized expectations? Resentment? Willingness to consider a different provider?

The website and mobile experience must feature great attributes, but this is just the start, the baseline of the easy button. Customer experience also includes the discovery and shopping experience, the pricing and negotiation experience, the delivery process, the training, the use, the maintenance, the loyalty, the returns, the customer service, the billing and invoicing, the operational experience and quality, the integration to other capabilities, the upgrade, and the end-of-life experience. In other words, the entire broad life cycle.

As a result, it should be no surprise that customer experience can also affect the entire business model and operating model of a company.

DESIGN METRICS FOR THE CUSTOMER EXPERIENCE

Review the customer experience metrics in your business. In most companies, metrics focus on the financial, operations, and process metrics aligned with the organizational structure. I know this through decades of first-hand work. And organizations work to optimize them. I live by the motto, “Show me your P&L, and I’ll show you your organization’s dysfunction.”

The point is that the need for financial and operational reporting, coupled with most executive compensation structures and the natural competitive streak across most teams, leads us to focus on and optimize along the P&L, which is typically our organizational structure.

Do your customers care about your organizational structure? No! But all too often, we make them aware of it and make them deal with it.

Complementing your typical metrics with customer experience metrics will improve customer obsession, help everyone break down organizational boundaries, and drive for operational excellence—in other words, perfection. What’s an example of metrics designed for the customer experience?

PERFECT ORDER PERCENTAGE: THE POP METRIC

Customer satisfaction lies at the core of Amazon’s business model. To determine how well its sellers are doing, Amazon uses specific performance measures, including the perfect order percentage (POP) metric. In short, it tracks the number of perfectly accepted, processed, and fulfilled orders.

The perfect order is entirely devoid of operational dis-ease. There are no A-to-Z claims (Amazon’s satisfaction guarantee), negative feedback instances, chargebacks, cancellations, late shipments, refunds, or buyer-initiated messages.

Amazon “recommends” that a retailer’s POP metric be above 95 percent. By “recommend,” Amazon means they will bring down the hurt if a seller allows the following metrics to fall above these stated goals: order defect rate greater than 1 percent, a cancellation rate greater than 2.5 percent, and late dispatch rate greater than 4 percent.

To remain in the 95th percentile or above, sellers need optimized listings, the best fulfillment options, and customer service offerings. It means identifying the products with the poorest performance and eliminating them.

The Perfect Order Percentage (POP): Percentage of Orders That Are Perfectly Accepted, Processed, andFulfilled

The POP metric system generally eliminates inaccurate listings, late shipments, missing tracking information, and canceled orders in the Amazon ecosystem.

What’s the equivalent of the POP metric for your customer experience?

Focus on ways to set and measure the customer experience. Take the time to figure out how to measure the real interactions, and you will reap all types of benefits from these efforts. Figure out what “easy” and “perfect” mean for your customers.

Customer Experience and the 2% Company

BCG conducted research and found a surprising result. Almost all companies struggle to excel at both operational excellence and innovation.

Very few companies can excel at innovation and efficiency at the same time. Of the 2,500 public companies we analyzed, just 2% consistently outperform their peers on both growth and profitability during good and bad times. These “2% companies,” as we call them, are able to renew themselves in large part by driving innovation and efficiency simultaneously. All ambitious companies should, in our opinion, strive to become 2% companies, which are positioned to succeed over time and thrive during both turbulent and non turbulent periods.¹ 

The three companies featured in the article are Zara (fast apparel), Toyota (automobiles), and Amazon (retail, technology, logistics, devices, etc.).

In my experience, the surest way to accelerate your journey to a 2% company starts with creating a culture of genuine customer centricity. It doesn’t stop there, but it is a central element.

When we intentionally measure and improve the customer experience, we tend to work as an enterprise versus separate tribes; we tend to stay humble and strive for better; our innovation springs from the efforts to create a competitive moat around our customers. It’s easy.

About The Digital Leader Newsletter

This is a newsletter for change agents, strategists, and innovators.  The Digital Leader Newsletter is a weekly coaching session focusing on customer-centricity, innovation, and strategy. We deliver practical theory, examples, tools, and techniques to help you build better strategies, better plans, and better solutions — but most of all, to think and communicate better.

John Rossman is a keynote speaker and advisor on leadership and innovation. Learn more at www.johnrossman.com.

1. https://www.bcg.com/publications/2018/2-percent-company