On 18 May, our Managing Partner Agustín Rosety participated in the 2nd Customer Experience Congress, organised by AMEC (Mexican Customer Experience Association), with a presentation entitled Alma, Corazón y Vida, una visión Customer Centric.
Using the famous bolero by the trio Los Panchos as a common thread, the speaker presented what, in his opinion, are the key elements of a company that wants to successfully implement a Customer Centric philosophy. The text of the presentation is reproduced below.
The Soul: the company’s identity
The soul of a company is its identity. If there is one company that has been able to provide its customers with an identity, it is undoubtedly Harley Davidson, which holds the curious record of being the most tattooed brand in the world.
Giving our customers an identity is important because customers do not buy products, but feel a certain way.
As its chairman Richard Teerlink once said:
“We don’t sell motorbikes, we sell the possibility for a 43-year-old accountant to dress up in black leather and ride around small towns on his Harley scaring people”.
One way to build identity is to do so from a strong purpose. Someone once said that Steve Jobs had a messianic sense of purpose. That’s why, in its Think Different ad, Apple told us the following:
“This is dedicated to the crazy, the misfits, the rebels, the troublemakers, the ones who go against the grain.
We build tools for such people. While some see them as crazy, we see them as geniuses.
Because the people who are crazy enough to think they can change the world are the ones who change it”.
But it is not only necessary to have an identity, it is also necessary to communicate it. To do this, companies use what we call experiential codes, which are sensory elements that activate the cognitive processes of our customers.
The image you see below is full of experiential codes, which activate a luxury experience. The colour black, the lighting, the golds, the velvets, … are all experiential codes used by luxury brands. And in this photo we see here, what are they selling us? Nespresso does not sell coffee, but has turned coffee drinking into a luxury experience , an affordable luxury, within everyone’s reach, because not everyone can afford to buy a Gucci bag but we can afford to drink a Nespresso coffee. That is why Nespresso uses the same experiential codes in its shops as Gucci uses in its own.
The companies’ marketing people take care of these details and, for this reason, the person who sells us Nespresso in the TV commercials is George Clooney, a person who brings together all the experiential codes of luxury.
We don’t have the problem in marketing, we tend to have the problem in sales because, although customers would love it, it is very difficult to get all salespeople to be like George Clooney.
A few years ago we worked with a cosmetics company, one of whose brand values was to provide their customers with a stamp of self-esteem. They hired us to see how they could improve the customer experience and, for that, we went to see how their best salesperson was selling.
The saleswoman had an infallible sales strategy. She had huge dark circles under her eyes and when she saw a customer with dark circles under her eyes she would say, according to her to empathise, “those dark circles under your eyes are like mine, they are hereditary, you have to take care of them“. And, from then on, with the client’s self-esteem at rock bottom, she would sell her serum, anti-ageing treatment and a lot of make-up to cover them up.
And it was the best seller, yes, but the customers left the stand devastated.
What did we do? Well, we developed a sales style whose aim was to make the customer passing through a shop feel younger and more beautiful. To do this, we trained the sales assistants to look for a beautiful feature in the customer and make her see it, for example, “with this mascara we will enhance your beautiful blue eyes”.
The customer who wants to buy make-up can buy it online, but if she bothers to go to the shop it is because she wants to have an experience.
There is one thing that is the DNA of the brand, which has to be present in the products, in the facilities and also in the sales people, who are there not only to sell but also to ensure that customers are happy with us and remain loyal. And achieving this is not easy, you have to understand how the customer experience is generated, you have to write sales rituals and, above all, you have to train and coach salespeople.
Our heart. Generating warmth in our clients
The second of the elements we are going to talk about is the Heart. According to the Human Brand model, developed by the American consultant Cris Malone, consumers evaluate brands based on two criteria:
- The first is competence, which has to do with the ability and effectiveness that customers attribute to the company.
- The second is warmth, which has to do with the friendliness, empathy and closeness that customers perceive in the brand.
It has to be said that you Mexicans are extremely warm people. In the projects we have carried out here, we have been amazed by the closeness and friendliness that your employees have with your customers. We Spaniards have a lot to learn from you in terms of warmth.
Only companies that are perceived as competent and warm will win the admiration and loyalty of their customers. Companies that are competent, but not warm, generate envy and distrust. Companies that are perceived as cold and incompetent openly generate rejection and contempt among their customers.
Well, a few years ago a study was carried out on competition and warmth in the Spanish market and you can imagine what came out. More than half of Spanish brands are perceived as not warm by customers. Look at the top right quadrant, no energy company, no telecommunications company and only one bank (ING DIRECT) and two insurance companies (MAPFRE and Mutua Madrileña) pass on warmth.
The fact is that large companies find it very difficult to be empathetic towards their customers.
We see it in banking, a sector that has become so efficiency-oriented that its branches only serve customers at certain times and refer them to digital channels. This is creating a tremendous backlash among older customers, who feel that their old bank is abandoning them at a time when they need it most, which has led to a social movement that is putting pressure on the government to force banks to provide face-to-face service to the elderly.
There are banks that have anticipated this movement and, instead of seeing it as a threat, have seen it as an opportunity. For example, Caixabank, which has created a specific value proposition for the senior segment with a specialised manager, has provided its customers with more channels adapted to their needs and has developed a range of products specifically designed for them.
One of the initiatives of Caixabank has been to train all managers of this segment in Gerontology, so that managers understand how their customers feel as they age. From Moebius we have trained them in a relationship model and specific skills to deal with this type of customer.
We have seen that telecommunications companies do not do particularly well on warmth either, having worked hard on modelling their customer service processes.
A few years ago we did a project for a global telecommunications operator. A study was carried out in which more than 2000 calls in 6 countries were analysed and it was concluded that there was no correlation between objective quality indicators, i.e. the strict compliance with customer service processes and the customer experience because this experience does not depend on the agent mechanically executing processes but on showing empathy, involvement and honest interest in the customer.
One of the cases we worked on involved a customer whose phone was stolen and who called to have the problem resolved. The agents who did the best were the ones who empathised with the customer, asked how he was and reassured him that no extra charges would be made and that his personal details were safe.
Can empathy be developed? The answer is that all competencies can be developed, but it is easier to hire employees who come with empathy “as standard”. As the saying goes, “you can teach a turkey to climb, but it’s easier to hire a squirrel”.
But empathy is not only a critical competence of the departments that are in direct contact with the customer, but a department that is so apparently distant from the customer, such as the legal department, has a direct impact on the Customer Experience. And if not, just tell it to the customer of this insurance company, one of the 5 largest in Spain, who received this letter informing him that his policy was going to be renewed.
On the basis of the contract, our insurer is entitled to unilaterally change the premium rates or benefits in the event of an increase in risk due to a change in your employment. Upon receipt of this letter, we hereby inform you that we waive our right to exercise this right.
Have you understood anything? Don’t worry, I’m not going to repeat it. The worst thing about this letter is that you are giving the customer good news, you are telling him that you are not raising his premium and, instead of taking advantage of this to generate a WOW moment, you are generating a real moment of pain for the customer.
Corporate lawyers do not write for clients, they write for the judge who will eventually hear the litigation they may bring. Therefore, some banks are defining a style of written communication to the client and are training all communication senders, including lawyers, on how to write with the client in mind and are measuring by NPS all employees, not only those who have direct contact with the client.
Life. Because companies want customers for life
But if we want our customers to spend a lifetime with us, why do we measure their value contribution only by the margin they leave us in the current year?
The finance department must also be customer-oriented and use Customer Lifetime Value as a metric, which is the value generated by the customer throughout his or her lifetime. The way to calculate this indicator is simple, i.e. average revenue per profit margin divided by the probability of customer churn. If we want to be even more rigorous, we would have to add the value of the third party prescription and subtract the acquisition costs. To see the importance of managing with this indicator, I am going to tell you an anecdote I experienced this summer. I am from the south of Spain, in the province of Cadiz, and I spend my holidays there every year. I have a friend who also spends his summer there, works in an investment bank in London and earns a lot of money. He has really made it in life.
My friend stays in the best hotel in Cádiz. This summer I went for a bike ride with him. I offered him a bike that I have at home and he said no, that he could borrow one from his hotel. His surprise was when they charged him 20 dollars when he returned the bike.
He is a client who loves Cádiz and has spent 10 years holidaying in the same hotel with his wife and three children. He spends $20,000 every summer. What is my friend’s CLV? Does it make sense to risk his loyalty for a measly $20?
At the Ritz-Carlton hotel chain, a world reference in Customer Experience, they know better. The CLV of a Ritz-Carlton customer is estimated at 250,000 dollars. That’s why touchpoint employees are authorised to spend up to $2,000 to satisfy any customer need.
Imagine the Best Friend who goes to a friend’s wedding, who has to wear the same colour tie as the groom and one hour before the wedding realises that he left his tie at home. So the receptionist, without needing anyone’s authorisation, grabs a taxi and buys a tie in the colour the client needs.
The most interesting thing is that employees use their power responsibly. They don’t party with customers, they are responsible, precisely because they are empowered.
Empowering cultures create accountability and customer experience, while hierarchical cultures create passivity and boss orientation. We come to the end of the presentation. Notice that we have talked about how different departments necessarily have to be customer-oriented: Marketing, Sales, Customer Service, Human Resources, Legal, Finance, … because each department has a partial view of the customer and different objectives, but as Fred Reicheld said this afternoon, the purpose of the company is to make the customer happy. And when the customer is happy, all departments end up meeting their objectives. Our job as Customer Experience managers is to help them through policies, processes and by providing methodological tools that allow all departments to have a holistic view of the customer.In this way, each department will cease to have a partial vision and will be fully oriented towards the customer and we will make our company, to a greater extent, a Customer Centric organisation. Then we will be able to look our customer in the eye and sing “listen to this song with Soul, Heart and Life. Soul to conquer you, Heart to love you and Life to live it with you”.
