Thanks to advances in technology, the customers are now in charge of the marketplace
Many of the great organisations are new arrivals that have won customer loyalty in a highly contested global market-place.
The Apples, Amazons and Facebooks of this world have put their creativity into forging brands that offer a consistent, distinctive experience with a clear value proposition. These are also companies that make it a point of pride to nurture, train and retain their staff members. Meanwhile, other organisations that once were everywhere are now nowhere. An instructive example is Blockbuster Video, which rode the video boom into the late 1990s. It started making most of its money from charging high fees to customers who were late returning their videos.
One of their customers, Reed Hastings, was trying to work out what to do with the money he’d made from selling a software start-up. He was so irritated when Blockbuster charged him a $40 late fee that he went away and founded his own company, which he called Netflix. Now Netflix is reaching more than 80 million subscribers, and Blockbuster is no more.
AGE OF THE CUSTOMER
Creating happy customers has never been more important. With nearly universal communication over digital networks, customers have access to many contact channels and a vast range of choice, and they’re quick to move away from supplies. This is seen as the Age of the Customer, a time when digital technologies and economic changes have combined to put customers in charge of their dealings with all kinds of organisations.
Customer experience has evolved rapidly since 1994, when the World Wide Web burst on the scene. This led to a rapid growth of commercial activity. Entrepreneurs rushed to build a digital presence, and customers were quick to embrace the new channel.
Organisations were just starting to grow accustomed to the web when mobile-phone networks began to reach into the digital data space. Mobile payments became possible in 1998, and in the same year mobile users were offered the first downloadable content (a ring tone). Since then, mobile phones with fast data access have become part of daily life.
All these developments have produced a customer who is better informed than ever before, and far more difficult to retain. Customers are also more connected, which gives them real power. When Canadian country musician Dave Carroll and his band were stopping over at Chicago’s O’Hare Airport in 2008, he heard another passenger say she could see workers throwing guitars on the tarmac. When he claimed his luggage at this destination, Carroll discovered that his $3500 guitar had been smashed. There followed a frustrating nine months negotiating with the carrier, United Airline. At first he was ignored, then United told he was too late to claim. So Carroll decided to write a song about it, ‘United Breaks Guitars’. The song went viral and I’ll never forget how everyone started talking about that song. I could tell it was a game-changer. Customers were fighting back and they were doing it in a big way. The reputational damage was something companies couldn’t ignore. They suddenly realised they needed to take social media seriously before it turned around and bit them.
Customer focus plays a big role at Dogfish Head Craft Brewery in Delaware, which launched as a brewpub in 1995. It grew from being the smallest commercial brewing company in the US to become the 16th largest craft brewery out of about 4000, it now has more than 230 employees. Founder Sam Calagione, takes a shared leadership approach that fosters a collaborative internal culture. He says in his book ‘Off-Centred Leadership’ (Wiley): ‘Moving to the next level is not just a matter of techniques and directives. In order for it to work, we have to continue to respect the things that made us strong in the first place – our recognition that we are co-workers, not employees, that we are doing this together. Our culture needs to be well articulated and permeate all levels of this company.’
Personality traits play a major part in hiring, and successful internal collaboration depends on fully using the different strengths of every member of the group says Calagione. The company stays in touch with co-workers through occasional ‘pulse interviews’ where they have a chance to provide honest feedback on what is working in their areas and what isn’t. Exiting employees are also asked to give assessments and the company especially values this feedback as being even more open.
Experimental brewing is encouraged, using unusual ingredients, the hallmark of the Dogfish Head style. The results are subjected to peer review at sampling sessions at ‘Beer Thirty’, the weekly intracompany celebration.
Co-creation is also used to deepen the relationship between the business and its customers, who are encouraged to have a say on what they would like in new products, or how existing ones could be improved. For example, Calagione nurtures a personal connection with customers. He goes to greet them when they visit the brewpub, uploading videos to his website and Facebook page. Often he finds, rambling beer-fuelled feedback on his answering machine on Monday morning. New brews start out in small batches sold at the brewpub, and at festivals. He averages two consumer-facing events evert week. He absorbs patterns in the feedback from beer lovers, distributors and retailers, as well as monitoring comments on internet forums such as BeerAdvocate.com and RateBeer.com
REGARDED AS VALUABLE
Facebook and Twitter accounts are not left to a junior but managed by VP Mariah Calagione. These are regarded as valuable forums, not only for comments on the various beers, but where customers express delight at surprises such as the free brewery tours with complimentary beer. Co-creation can save organisations a lot of time and money by working up-front with customers to ensure the value proposition, product or service can be tailored to hit the spot with their target market.
Excerpts from Good to Great CX: Customer Experience Strategy to Execution by Isabella Villani Major Street Publishing, October 2016. See ISB 13 for a review of Off Centred Leadership: The Dogfish Head Guide to Motivation, Collaboration & Smart Growth (Wiley).
Director & Chief Customer Officer
0407 889 987