Customer Experience Management Certification - London!

Shameless plug:

I'm co-teaching a certificate course in Customer Experience Management in London. Here is a link to the official PDF with all the details.

In a nutshell, registration closes September 17, for a September 26-7 two-day course just outside of London, close by Heathrow. Come for the course, stay for the weekend and have a blast!

I've been teaching these for a while now, and always have a ball with the attendees. Corporations send the big guns: chief marketing officers, CRM honchos and, lately, Vice Presidents or Directors of Customer Experience. That's a watershed, I think. I've seen customer experience management adopted at a higher level, faster, than I saw adoption of CRM-related titles at the beginning of the CRM wave. People understand how important customer experience management is.

Sampson, my colleague who co-teaches with me, is a CRM and CEM consultant based in Hong Kong, and the guy who runs the single largest customer management online community in China. I'll be teaching this time with Jennifer Kirkby, former CRM research director for Gartner, one of the clearest guiding voices in the analyst biz.

If you can make it, it will be great to see you there. Or, send the PDF to someone you know, if you think they could benefit from a deep drill-down into customer experience management's ability to help companies compete.

The picture was taken by a TRIUM colleague of mine when we did our London module. Many thanks for allowing me to use it. If you want permission to use it, contact me.

Chrysler Steals Toyota's Competitive Advantage! Not.

Big news here: James E. Press, formerly the highest ranking Toyota North America executive, is now co-president at Chrysler. The article mentions that Toyota North America is not fazed, and they promptly replaced Mr. Press with a Japanese executive (I predict this is a temporary move). The Toyota Way, normally defined as an approach based on principles "which emphasize employee involvement and continuous improvement." This is contrasted with the top-down management style of Chrysler that relies on a charismatic, strong leader.

So, what will Mr. Press bring to Chrysler? After all, hiring him is a sign that the private equity company that bought the automobile manufacturer probably isn't going to strip it down and sell it. So surely Mr. Press has talents that fill a gap.

I don't think it will be teamwork and continuous improvement. To do this, he'd need a team that fits the Toyota culture. And he'd need some control over manufacturing. As for teamwork, he's got to fend off Robert Nardelli, Chrysler's new CEO, recently of Home Depot. Ah, now you see. Yes. This is the guy who got the golden parachute, earning millions and outraging just about everyone but his family, even though he eviscerated the Home Depot customer experience, hammering down its customers' satisfaction levels (see here), and sucking the wind out of Home Depot's stock.

Oh, sure, Mr. Nardelli shouldn't take the blame for a slow housing market. Right. (I hope you can hear my sarcasm.) When people buy houses, they use Home Depot. When they don't buy houses, they use Home Depot to fix up the one they're keeping. How was Lowe's stock doing during his tenure at Home Depot? Look at what Google Finance tells you in the chart below.

Lowe's has a strong reputation for delivering a great in-store experience. How important is that? New Home Depot CEO Frank Blake has reversed the company's slide in marketshare loss, even though the housing market it truly in crisis. How? Improving the customer experience. See here.

OK, back to how Mr. Nardelli's track record at Home Depot presages his approach at Chrysler. What was his mantra while managing things at Home Depot? GE style top-down management (certainly as authoritarian as Chrysler's existing culture) with continuous improvement. Any guess what mantra he'll use at Chrysler as CEO? Probably the same thing. Probably with the same results. Improvements in his way of thinking probably included things like profit per employee. Easy to make that go up by firing your front line. That's a sure what to annoy Home Depot customers. While I'm not privy to the actual metrics that Mr. Nardelli optimized, I know the result was that he damaged satisfaction ratings and dropped the stock. If he uses similar methods at Chrysler? That's not good news.

With all this as background, Mr. Press is window dressing right now. He can't be much more unless he's able to do what has made Toyota truly strong: Build cars that meet the full range of customer requirements. These include things like solid door closures and green engineering. These are critical examples of how customers filter information about their choices in the market. A door closure that sounds solid sends a signal about the entire care -- and about the entire company. Toyota didn't invent hybrid technology, but they own it in the minds of US consumers (just ask 10 people who invented the hybrid car), because Toyota can credibly claim it and US companies (who invented hybrid technology) cannot credibly claim it. Facts matter less than perceptions.

That is what has driven Toyota: they understand market perceptions. And even though they surely believe in continuous improvement, they are not competing at the margins. Little changes and improvements are fine, but Toyota wants the customer for life, and to do that, they think in a much bigger picture, and over a longer time frame, than American automobile manufacturers do. Period.

Mr. Press is likely to be on the sidelines watching his co-president Tom LaSorda, who heads up manufacturing, and Mr. Nardelli wring "profit" out of the company to bolster shareholder value. Will Mr. Press ever get in the game to build a company based on a true customer focus? I hope so. And if he gets this mandate, he's got his work cut out for him. It will require a change in culture, information sharing, processes, strategic planning and financial investments with long time horizons ... in short, a lot of stuff that private equity firms don't know much about.

We need to look at Mr. Press' appointment with a jaundiced eye. After all, to really bring his value to Chrysler, he's really got to run this show. And, the measure of his success should be winning back the credibility of the company in the eyes of consumers.

It's not about making good cars -- Chrysler already does that. It's about building a company that global consumers can be passionate about. From this, profits can come. But don't put profit down as his main measure of success. It's long past time when corporate decisions were driven from transaction data, or from (at best) customer data poorly integrated into service, innovation and touchpoint management. It takes a really sophisticated company to understand what drives profit for their target markets. And it takes a company that can work as one. Looking at the top of Chrysler's management, I see problems ahead.

[NEWS FLASH: Chrysler has just named Phil Murtaugh as CEO of its Asia operations. See here. Phil has been running SAIC Motor, the huge car maker from China that, along with companies like Chery (think "Chevy knockoff" and you're most deeply correct) and First Automobile Works, has been bringing the Chinese car industry up really fast. In the next few years, the efforts of companies such as SAIC will be obvious in every major Western market. I think Phil is going to really help out Chrysler, by forcing the executive team to look at customer-relevant quality (the localization part of globalization) as well as helping them figure out the labor arbitrage issues. I hope he gets close to the US labor unions who have so much at stake with Chrysler's success.]

Apple's new iPod, and one-button Starbucks purchase

One of the five forces of customer experience management is the customer's awareness of a company's brand. This is separate from their awareness of what other people THINK of that brand.

But one of the nuances here is tricky, because in the world of branding, no brand stands alone. Think of Gucci. Somewhere in your head, some neurons on firing, and nearby is the cluster of neurons you've set aside for BMW. And, probably, Apple.

And, perhaps, Starbucks.

So, when Apple does a deal with BMW (as they have), and with Starbucks (as they've just announced today), you got a lot of neighboring neurons lighting up like stars.

When companies in different sectors partner up like this, they're called constellation partners. They don't even have to spend a lot of money to get a ton of brand equity out of the partnership. I doubt seriously that the iPod jack in the MiniCooper (a BMW product) sold that many MiniCoops. Nor did it drive a ton of iPod sales. In fact, the whole deal probably COST Apple and BMW more than they could point to in revenue.

BUT, that's not the point. The point is that people talk about it, and the buzz activity reinforces the brand positioning of both companies. Free promotion, baby, and of the best kind, because the closeness of the brands combines with the novelty of the relationship to create something really memorable and strangely logical.

And think now of what it means to be able to walk into a Starbucks with your new iPod Touch(tm) and push a single soft-button to buy the tune playing at that very moment within your Starbucks. (And they play some darn good tunes.)

This is a great example of a spin on that force of customer experience management we just mentioned, because it not only is a direct customer experience of the Starbucks brand, and of the Apple brand, but it is also an experience of the constellation of the two of them. I will growl at the first person who uses the phrase "brand synergy". We don't need synergy added to any more business phrases. And we already have constellation to describe this kind of phenomenon. People experience the stars, connect the dots and see a bigger picture -- Steve Jobs as Orion, Starbucks as Aquarius.

So in six months, when you go into a Starbucks and see Apple users pushing buttons on the iPod Touch, don't be surprised if you see some PC laptop users glowering just a little. In the past, they might have been able to live happily with their Dell or HP laptop, but in a few months they're going to feel like Steve Jobs just bumped ahead in line for a double shot of cool.

Intro to Web Two Oh

Our trips to Florence and Paris

Trying out a new slideshow widget that mashes up Flickr and Blogger. Scroll to the bottom of the blog and check it out!

Fed Up with UPS

Every once in a while, for some bizarre reason, Amazon ships me a book UPS ground with the requirement that I sign for the package. Why only occasionally? Weird. Not that it's a big deal, since I keep a fully quipped out office in my home, so I can usually hang out and wait.

Now we get to my complaint. The UPS delivery guy has been claiming that he's tried to deliver the package but that I've not been home. Not true. Is he lying? Here are the possibilities:

1. The call box on our condo building failed.
2. The call box on our condo building worked, but I didn't hear the phone call.

In the first possibility, you'd think that the driver would leave a note to that effect. No. In fact, in all the three delivery attempts on record, he only left ONE note, on the SECOND attempt. After the third attempt, I got a postcard saying they were about to send the package back, and I should call, or come by to pick it up. I called and arranged for another delivery today. I left my home number (in case possibility 1 was in play), my cell phone number (as a backup), and I even left a note downstairs that the UPS guy should HONK HIS HORN if neither of those were viable.

After waiting all day, I finally checked package delivery status online. The UPS record claimed the guy had come by at roughly 2pm and that I was not there to receive the package. Not true.

So maybe possibility 2 is in play?

No such luck for UPS: my caller ID on my phone shows no attempt was made to call our unit. My wife just tested the call box. Works fine.

So, I called. I complained. A long CRM software nightmare story should be written. But for now, I just want to let you know that you CANNOT COMPLAIN TO UPS ON THEIR SITE.

If you search the site for the word "complain" in fact, you get zero results.

Hmmm.

What are the business lessons here?

I'll post my thoughts on that later. In the meantime, I need some serious yoga, or meds, or liquor, or all three. Yeesh.

UPDATE
September 27, London, UK
A colleague of mine, Scott Seiden of Customer Centric Strategies, just mentioned that Sirius, the satellite music service, just discontinued his favorite jazz station without notice. He called to complain -- and the customer service rep couldn't accept the complaint. There was nothing in the CSR system to capture that. So Scott went to the Sirius site -- no go. They don't have a place on the site to accept complaints.

So how can Sirius figure out why they have customer churn? Don't they realize that churn destroys profitability? Perhaps this institutionalized deafness to the customer explains their stock performance relative to the S&P 500. Wanna see?

Hmmm. It may be time to do a study on online complaint best practices. Anyone have such data?

The Power of Social Networks

Want to see the "network effect" in action? Check out site activity for three different sites dedicated to reviewing common entertainment outlets (restaurants, clubs, etc.). All three feature user-generated content, so they engage their audiences in building up their assets. Why is Yelp so powerful? Write me.

Click here for the three year comparison of Yelp, CitySearch and Zagat.

Be a thirty winker and start your own 1% movement

Mark Penn of Burson Marsteller is profiled here, promoting his new book, which is a must-read tome on the power of microtrends. The article points out a few segments of society who are not just trending up, they're changing society.

BusinessWeek on Web 2.0

Here's a good summary of what's at stake with Web 2.0, viewed from a strategic perspective.

Web 2.0 Has Corporate America Spinning - Business Week, June 5, 2006

A lot has changed in the last year. More mashups and mashboards have popped up, and they include certain proprietary elements or protocols to make them more enterprise-friendly.

The key thing to remember is what the Business Week article points out at the end. Brands are owned by the people who use the products. This has always been true, but consumers have in the past been suspending their disbelief in their trusted brands (for a lot of reasons), giving companies more of a chance to influence brand perceptions through advertising. Now, consumers are surrounded by multiple sources of information, opinion and values-based filters -- what I call the Five Forces of CEM -- and so companies now have to compete in a new arena to maintain brand mindshare.

Check out the article!

Whole Foods redux

Anyone tracking my comments (here and in public) on the Whole Foods acquisition controversy know that I believe the following:

1. Whole Foods is a grocery store, and small one compared to Safeway, Kroger, Albertson's or even Wal-Mart.
2. Even with Wild Oats as part of Whole Foods, the organic supermarket is small -- er, um -- potatoes.
3. The notion that the acquisition is anti-competitive is ludicrous.
4. On the other hand, the fact that people THINK it might be anticompetitive is proof that Whole Foods blue-ocean differentiation model was successful. They've created a new "category" of supermarket by exploiting and increasing demand for a new way of looking at food and groceries.

At what point, pundits should ask, is a "niche" actually a new sector? I would argue that this happens only when the niche has so redefined the sector that customers of that niche would never view companies outside that niche as viable choices.

Do you think that Safeway, Kroger, Albertson's and so on want to be viewed as an alternative to Whole Foods? You bet. David Scheffman, who provided expert testimony said that Whole Food customers will also buy organic products from other grocery stores, "which are increasingly offering such alternatives," although, in my opinion, not yet substantially enough. (See here for a nice short article on the legal and market details of this story.)

The issue raised that the judge should review pricing information from markets where Whole Foods and Wild Oats compete I believe is ultimately a moot one. The market principal would appear to be that, absent any local competition in organic groceries, one of these two companies would raise prices, indicating that more competition is better for the consumer. Well, this is true, but if that's so, then every "region" dominated by a certain retailer is a market that is unfair to consumers (where "region" is fuzzy, defined perhaps by the radius of the market's willingness to travel for products). As a practical matter, this impossible to enforce through regulation. In fact, one of the functions of a marketing analytics consultant to is determine the effectiveness of pricing strategies for national and international chains based on the proximity of competitors.

In short, consumers do indeed have choices. We shouldn't punish Whole Foods or Wild Oats for choosing a niche that has gained meaningful traction with consumers, thereby building their resistance to the less thoughtfully prepared/distributed products at the major chains.

This is not just a US phenomenon. There has been interesting analysis recently (see the Economist) on Wal-Mart's struggles in the UK point to a similar trend, I should point out. Tesco, a legendary grocery chain in the UK, is selling more organic products. This skews well to older, less price-sensitive consumers, and to younger, more health-conscious consumers. Wal-Mart's UK presence is represented by ASDA, which has until recently been pushing its every day, low price strategy.

But it's not been working for them. Some say that ASDA will eventually try to compete by offering organic products, but the key issue is the ASDA brand positioning. They will have to run away from "every day, low prices" as the real estate they own in the UK brain. They will have to become a different kind of grocery retailer. And the question is, does the Wal-Mart operational advantage really work for this kind of market positioning? Isn't organic all about local produce, higher costs of sourcing, smaller purchase lots, and so on? Wal-Mart is not geared for that.

Plus, Wal-Mart isn't culturally focused on a localizable customer experience. My fellow blogger Arun Kottolli said last year, "ASDA competes in grocery segment and in this segment ASDA has got it wrong. ASDA stores are modeled after a big store format. I visited ASDA today at Burnt Oak and the greens were a bit old & withered. The fresh ready-to-eat sandwiches were placed far away from the cash counter - making it unattractive for a casual customer. The merchandize [sic] is no way near the range & quality that as in the US."

Note that the merchandising is counter to creating a positive, branded customer experience. First, ASDA should want people to instantly associate it with gorgeous, local and organically grown produce. Whole Foods' first 10 seconds is dramatically better than ASDA's. Second, it is a common strategy for retailers (IKEA, for example) to force consumers to take the longest reasonable (or unreasonable) path around the store to maximize their purchase on that visit. ASDA may have put its prepared sandwiches far from the register on purpose.

What message does that send?

Of course, it may well be that ASDA doesn't care to improve that particular component of its customer experience. After all, you cannot and should not maximize customer pleasure at every point. (You can't afford to, and if you did you would be, interestingly, much less memorable for the experience points you want to own.) So let's grant that they are not looking to be remembered as a "convenient" place to shop.

Then, what will they stand for? ASDA (and therefore Wal-Mart) will be one to watch in the next twelve months.

Social Entrepreneurs

Should companies be built on socially conscientious values, or on a profit motive? What happens when the two converge? Calvert Venture Partners, a Washington DC-based fund manager offering 40 funds, believes a lot of money can be made investing in "green" companies, because the market is demanding them. See Calvert.com.

But the story is deeper, I think. Companies over time will need to consider how to appeal to the values of their markets, not just to the market's demand for a "unique selling proposition".

I've been doing a lot of research on this topic because it affects everything I do in the CRM and customer experience management area, especially in developing definitions of brand values and protecting companies from cultural and product liability risks.

Here' an interesting link you can check out on the topic, to see who's doing what, and why, in the area of socially responsible capitalism.

Whoa

"Seven blunders of the world that lead to violence: wealth without work, pleasure without conscience, knowledge without character, commerce without morality, science without humanity, worship without sacrifice, politics without principle."
-Mahatma Gandhi