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Fundamentals of a Customer First Strategy For Every Industry

Every industry strives to improve their customers’ experience with their products and services. Adopting a customer first strategy is therefore in many company objectives. Unfortunately it rarely goes beyond the theory in many organisations, so I decided to help out with these six suggestions.

Hospitality is perhaps one of the most visible industries where customer satisfaction, or lack of, is quickly shared with the world.  It is true that without satisfaction, customers will not return to a hotel or restaurant. And they will almost certainly share their (bad) experiences with anyone who will listen.

Hospitality is also one of the industries that receives the most comments online, thanks to TripAdvisor and other booking sites. There is no hiding from their clients for hospitality! While I empathise, it’s not all bad news. This is because it also means that great service will also be more quickly seen online. Therefore you can make changes and see the results almost immediately, or at least far quicker than in most other businesses.

However, despite this, I believe that the hospitality industry has a lot it can learn from consumer packaged goods (CPG). In fact most other industries could benefit from taking a look at some of CPG’s best-in-class processes.

Both the hospitality and CPG industries have their customers at their heart. They are both founded on pleasing and hopefully delighting their clientele in the quality of the products and services they offer. However, as the world changes, customer demands do too and companies need to stay current if not ahead of these requirements in order to ensure continued growth.

#1. From ROI / ROR to ROE

There has been a lot of talk recently on moving from a return on investment to a return on relationships. Whilst I agree with the importance of relationships, I believe that what we should be talking about is engagement. Be honest, other than the popular book that started talking about brand love, who wants to have a relationship with a brand?!

Brands that have a high following and loyalty have found a way to consistently engage their fans and keep them coming back. They become involved and interested in the brand, the product, their website, even their communications. Coca Cola and Red Bull are great examples of this. You should also check out another post entitles Increasing Impact & Engagement through Advertising Testing.”

Brands that have a high following and loyalty have found a way to consistently engage their fans and keep them coming back. #CEX #CRM #Engagement @C3Centricity Click To Tweet

 

#2. Build relationships with strangers

Whilst the hospitality industry has been based on serving and satisfying its guests, in today’s connected world it also needs to consider people who are currently strangers – but who could potentially become clients. These might be the friends of current guests, which for example the Rosewood Mayakoba resort in Mexico tries to attract.

This wonderful hotel encourages its guests to photograph their experiences during their stay at the resort and then to share them with their friends on Facebook. This not only provides free publicity for the hotel, but also enables it to start engaging these potential clients, since they probably have similar lifestyles to their current guests.

User generated content (UGC) works well because customers trust each other a lot more than they do brands. Research from Forbes shows that 81% of consumers’ purchase decisions are influenced by their friends’ social media posts.

For some great examples of successful UGC campaigns, I highly recommend checking out this article on Wedevs. You may also want to readThe Exceptionally Easy & Profitable Uses of Customer Co-creation.”

User generated content (UGC) works well because customers trust each other a lot more than they do brands. #CEX #CRM #Trust @C3Centricity Click To Tweet

 

#3. Value is more important than price

Having additional control in their lives today means that customers are re-evaluating what they are offered. They have higher expectations and are more discerning in their choices. They expect recognition at every touchpoint, even if in reality their peers influence their decisions more than does traditional marketing.

The internet enables them to compare offers, so they are less interested in bundled propositions, preferring to decide what is best value for them personally for each element. Several brands have understood this and now offer the customer the possibility to define their own, personal bundle of options. Liberty Mutual is one such example of this.

According to research by Walker, 86% of consumers would be willing to pay more for a better experience. So don’t get fixated on price; find ways to add value that consumers may appreciate far more than its actual cost to you.

To learn more about pricing and value check out “Sourcing & Services Matter: Why Price Alone Won’t get your Customers to Stay.”

Don't get fixated on price; find ways to add value that consumers may appreciate far more than its actual cost to you. #CEX #CRM #Trust @C3Centricity Click To Tweet

 

#4. Renovation is more than for buildings

Most CPG companies have targets for Innovation & Renovation, sometimes 30% or more of annual revenue. They also have mid-term innovation pipelines which can include partnerships in joint ventures with what were previously only competitors. These help each partner by building on their individual talents and enable them to develop better products and services.

For hospitality, innovation can no longer be purely physical or rational; we need to consider more emotional and relational ways to satisfy. The Rosewood Mayakoba resort, already mentioned above, is one good example of this; the Art Series Hotels are another. Check out the latter’s recent ad to understand better how they excel at understanding their guests: Art Series Overstay Checkout, or why not review the picture posted on MayaKoba’s Facebook page?

If you want more ideas on innovating, then read “A Customer-First Approach to Successful Innovation.”

 

#5. Loyalty is never really won

One of the reasons that I believe we need to work on building engagement and in all industries, not just hospitality, is because customer demands are constantly evolving. What satisfied them yesterday can bore or even disappoint today.

To acquire and retain our customers, we need to be constantly upgrading our products and services, so that they will be surprised and delighted. This means that loyalty is much less long-term than in the past and lifetime value is now measured in months or a few years, rather than in decades.

To acquire and retain our customers, we need to be constantly upgrading our products and services, so that they will be surprised and delighted. #Customer #CEX #CRM #Satisfaction @C3Centricity Click To Tweet

 

#6. Dialogue, don’t just communicate

In today’s connected world, customers want a say in not only what they consume, but also where, when and how they are marketed to. They want a say in what they buy and expect a rapid resolution to any queries or complaints. According to a recent Edison Research, 20% expect a company to answer to their social media posts within 15 minutes, 42% within the hour! That means 24/7 monitoring for all organisations if we are not to disappoint our most engaged customers.

We must have 24/7 monitoring if we are not to disappoint our most engaged customers. #CEX #CRM #Customer #Engagement @C3Centricity Click To Tweet

 

These are just six of the many ideas I shared during a presentation I gave to the faculty of a world- renowned hospitality school. If you are interested in seeing the full talk, I am happy to share it. Just email me with your details and what your biggest business challenge is currently in adopting a customer first strategy.

Are you too struggling to improve your own customer centricity? Whatever people-facing industry you are in, we would welcome the chance to support and catalyse your efforts. Please check out our website for more information about our services and training courses, or contact us here.

Do You Know Your Customer Journey Map & the Emotions Overlay?

A recent post by John Ollila on Loyalty Lobby  about customer journey maps and touchpoints in the leisure industry prompted me to share with you, an experience I had recently with the Hilton Group. And more importantly the lessons we can all learn from such disasters!

Each year around Christmas time, my family get together for a weekend of fun somewhere in Britain. This year we met up in Bristol. As a Hilton Honors member for more than twenty years I offered to book rooms for all of us in the local Doubletree. I expected to get a better rate with my membership, and especially cheaper than those offered by the booking sites. After all, why pay a booking site when I know the hotel I want to stay in, right? Well, I booked five rooms for the weekend, as well as a table for ten in their restaurant for dinner on the Saturday evening.

I booked directly by calling the hotel, as I always prefer to do. I expect to be recognised for my loyalty – and if possible rewarded too! On this occasion I was proven seriously wrong!

A couple of weeks after booking and pre-paying for all the rooms, I received Hilton’s weekly email offering me a significant discount for the exact same hotel and dates. Clearly their online pixels had identified me as being interested in this hotel, but they hadn’t connected this interest with my having booked directly. Already there, you can see that they have an incomplete customer journey mapping process.

As Hilton offer a “guaranteed lowest rate” I reached out to their call centre and was told that yes I was entitled not only to the lower rate, but to an additional 25% discount for having made the claim. I was told how to complete the claim form and I hung up ecstatic that I could save my family some money – which we would no doubt anyway spend in the bar before and after our dinner!

Imagine my surprise when the next day I was told that my claim had been refused! I was informed that the guaranteed lowest rate only applied to third-party sites and not to Hilton’s own website!

Guaranteed lowest rates should mean just that! Otherwise you're just cheating the customer. #CEX #CRM #Customer Click To Tweet

I immediately responded and was again told that their guarantee didn’t apply to their own rates. In addition, as I had pre-paid I could not get the lower rate even if it was now being offered!

Not being one to take “no” for a final answer, I contacted their corporate customer service group again, as I felt my loyalty was not being recognized. I was once more given the same response, but this time was informed that my request would be forwarded directly to the hotel concerned – no doubt to get me off their (corporate) backs!

The hotel immediately responded saying that although it is corporate policy not to include direct bookings in their lowest rate guarantee, they would in this case give me the special offer. I was very pleased doubt that they at least recognised the benefit of customer satisfaction and restored my faith in the Hilton group – somewhat.

That should have been the end of this story, but it’s not. Hilton have surpassed themselves this time in terms of customer service, or should I say a lack of it?

My brother called me the following week and informed me that the hotel’s website was showing that their restaurant was closed on the day I had booked it. I immediately rang them and spoke to the same person, who remembered me and assured me our table for ten people was booked. She said she would double check again just to be sure, so in the afternoon I called back not wanting any last minute problems with my family.

Surprise, surprise, I was told the restaurant was booked for a private party. What about my reservation made more than a month ago? Shouldn’t someone have contacted me? I demanded to speak to the manger, who apart from profuse apologies, said she would raise the issue in their operations meeting later that day.

She called me back that evening, to say that there was nothing she could do. It was their mistake and they would be happy to book me elsewhere in the city. I explained that my family had booked six rooms for two nights at their hotel so we could eat at their famous restaurant (my married sister had booked separately). No solution offered; an admission of fault but no compensation offered and no alternative other than to book at another restaurant! Their suggestion was their sister hotel down the road, a bland, modern affair, with no atmosphere.

This farcical situation continued during the whole weekend, but I won’t bore you with the details, as I would rather use this incident to demonstrate how Hilton (and you) can be better prepared.

Three Lessons Learned which Every Business Can Apply

So what lessons are to be learnt from this example, even if we work in a completely different industry? I came up with the following points, but would love to hear what other issue of customer journey mapping you would add; just leave me a comment below please.

1. The customer journey needs to integrate all possible contact points.

In Hilton’s case this is clearly not done. I was personally offered a cheaper rate at the hotel at which I had already booked five rooms! Clearly they had identified that I had reviewed prices online and then offered my the cheaper rate.

Unfortunately without their email, I would never had known and would not have checked prices again since I had already booked. And more importantly have become dissatisfied with my booking. Also, hotel prices usually go up not down closer to the day of arrival, at least so I have been led to believe. If this is not true (any longer) then I fr one will only book last minute in future!

Lesson: You must include all customer touchpoints in your journey map, to avoid such disappointment. By using an incomplete model, Hilton opened themselves up to angering a loyal customer rather than appealing to potential new ones.

Include all touchpoints in your customer journey map, otherwise it's a dangerously incomplete model. #CEX #CRM #Customer Click To Tweet

2. If you mess up admit it AND correct it

After calling to book the rooms, the hotel put me through to the restaurant to book a table for the Saturday night. Everything was confirmed and I would not have checked details until arriving at the hotel and checking in.

The excuse that the closure of the restaurant is on their website didn’t go down well with me. After all, they themselves had transferred me and taken the reservation in person, so why would I need to go to their website?

Lesson: An apology for a mistake is not its resolution. Proposing to book another restaurant in their sister hotel was nothing more than I could have done myself. I didn’t feel that Hilton were interested in correcting the situation that they themselves had created. They did not go out of their way to make things right. When your company makes a mistake, find a solution that is acceptable to your customer, not just the quick fix that suits you.

An apology for a mistake is not its resolution. Don't expect your job to be done until your customer's problem is solved and they are delighted! Click To Tweet

3. Follow up to make sure the customer is happy

I often speak about delighting the customer but your first aim is to ensure your customer is happy with the solution that you propose. Only after that can you look to see how you can go above and beyond what they expect, so they are both surprised and delighted with how they have been treated.

It takes a strong person to admit when they’re wrong, but a stronger one to want to go beyond just putting it right. Which are you doing?

Lesson: Replacing a faulty product or service is what our customers expect. Offering free samples, a further discount, express delivery or additional attention is not. These are the small touches that surprise and delight. They are also the things that your customers will share with friends and family, if not the world through social media. Suddenly you have gone from being the bad guy to the cool guy. 

Replacing a faulty product or service is what customers expect, but it's not enough! Doing more to surprise and delight are the things that they will share with friends and family. Click To Tweet

 

Customer journey mapping has become much more complex today, as the touchpoints customers use before, during and after purchase have expanded exponentially. However the process of identifying and understanding this journey remains essential to delighting each and every customer.

 

One further element which I suggest my clients add to their map is the emotional state of the customer at each interaction with a touchpoint. This simple addition will clearly show where a brand needs to improve its customers’ interactions because their emotional experience is sub-optimal.

If you would like to learn more about customer journey mapping and engagement in general, then check out our 1-Day Catalyst training offers and contact us HERE for a free, no obligation advisory session. 

Looking forward to speaking to you soon!

Denyse

 

 

 

How to Innovate Successfully (What You’re Still Getting Wrong!)

I’ve written a number of posts on innovation and yet I still get client requests to further help them innovate successfully!

One of the favourite articles here on C3Centricity about the topic is “Improving Ideation, Insight & Innovation: How to Prevent Further Costly Failures.” 

Despite all the great ideas and tips it includes, I believe there is still more I can share. That’s why I am adding to last week’s post on marketing in general, with a post specifically about improving your innovation. In particular, I wanted to help those of you who may be unable to complete all the “best-practice” actions I recommend, through a lack of resources, be it time, money or people.

Not every organisation has access to large market research or marketing departments and extensive budgets. In fact, in many companies these roles are being handled by one and the same person with very few resources; is that your case? If so then you will definitely find this post of interest. But even if you’re one of the luckier ones with a good size team and plentiful budget, I’m sure you will still find value from the ideas shared.

Let’s start by taking a look at some of the reasons why new products fail. And then we’ll identify some creative ways to completely eliminate them from your next launch. Sounds good? Then read on.

Why your innovations fail

Did you know that the proportion of product launches which fail every year is generally “guesstimated” to be somewhere between 74% and 95%?

Why CEOs accept such abysmal levels and accept their organisations’ continued use of the same old innovation process is beyond me!

Book on innovating successfully

In this article in HBR, Saul Kaplan, author of “The Business Model Innovation Factory” shared five important reasons that explain why companies fail at business model innovation:

  1. CEOs don’t really want a new business model.
  2. Product is king. Nothing else matters.
  3. Cannibalization is off the table.
  4. ROI hurdles are too aggressive for fledgeling models.
  5. Rogues and renegades get no respect.

I find these five reasons spot-on. They are all based on fear of getting outside the organisation’s comfort zone. If you can identify yourself with even one of these, it might explain why your innovations are not as successful as you would like them to be.

Successful innovation involves change, and human beings don’t like being out of their comfort zone. It may involve challenging accepted ideas and ways of working too. No wonder so many innovations fail.

And with such odds, I think it is incredibly courageous to start a whole company based around just one new product idea, but that seems to be the norm for startups in many areas today.

Taking the organisational reasons mentioned above, I’d like to detail ten more ideas I have found in my work with clients as to why innovations fail:

#1 The process itself: Innovation is by definition a creative process, but many organisations use a well-worn, restrictive and uncreative process to develop their new products. As David Gluckman says:

“Committees are the death of innovation.”

As mentioned earlier, we don’t like things that shake up our comfortable beliefs and actions. Committees are unlikely to come up with groundbreaking innovations, just because they’re a group. In such teams, you tend to go with the least disruptive idea that everyone can accept.

#2 Meeting company quotas: It is surprising that with such miserable success rates, so many companies – and which shockingly include many of the largest CPGs around – continue to fix quotas on the number of annual new product launches.

How crazy is that?! It just encourages too many new products to be launched too early, and almost guarantees their failure!

#3 Lack of customer understanding: This is most likely one of, if not the most important reason for new product launch failures. And I don’t mean that you should ask the customer what he wants; he doesn’t know until you make it available to him in many industries. Successful innovators know their target customers better than they know themselves!

#4 Lack of category understanding: This follows on from customer understanding, in that you need to identify how the customer is currently working around or compensating for their need today. Don’t assume you are competing in a certain category until you have identified what the customer is currently doing or using. That is the way to identify your true competitors.

#5 Not living up to your promises: If you promise a better, cheaper or more enjoyable experience, then customers deserve to be able to confirm this when they buy. Especially in today’s connected world, if you disappoint by not meeting customers’ expectations, your product will fail even more quickly than in the past. Early-adopters will Tweet or leave comments on Facebook, Blogs or other social media platforms for all to see.

#6 Not being sufficiently differentiated: Following on from living up to your promises, customers need a reason to change their behaviours. Depending upon the category this can be costly, whether in time, money or effort.

Many customers prefer to continue buying an inferior product or service than making the effort to change. Just think about industries such as Telecom, Banking, Hotels, Air travel or Insurance. These businesses are in a constant battle to differentiate themselves and provide a real advantage to attract new customers. Luckily for them, at least until recently, the effort of leaving was perceived as greater than the pain of staying.

#7 Being too different: Whilst not being sufficiently differentiated can be a certain cause of failure, being too new can also meet with no success. The reason for this is that if customers are totally unfamiliar with the new product or service offering, you will need to spend considerable resources to educate them. If you are unable or unwilling to invest the time and money in doing this, then you will undoubtedly fail. Attracting more than just a few customers who are willing to spend time understanding what you are offering takes resources.

If you are unable or unwilling to invest the time and money in doing this, then you will undoubtedly fail. Attracting more than just a few customers who are willing to spend time understanding what you are offering takes resources.

#8 Pricing yourself out of the market: I’m not just speaking about pricing your product too high; being too low can also negatively impact your likely success. Part of a customer’s perceived value of a new product, especially before buying, comes from the price and expected usefulness to them of the promise you make.

Part of a customer’s perceived value of a new product, especially before buying, comes from the price and expected usefulness to them of the promise you make.

#9 Inappropriate distribution: This can be the consequence of an incomplete understanding of your customer and is also linked to differentiation. Whilst you can just follow near competitors into their own distribution channels, why ignore the possibility of being available exactly where and when your customers might just be ready to buy it the most?

#10 Being too far ahead of the customer: There are many examples of great products that were ahead of their time. Gillette brought out 2–in–1 shampoos with conditioner and shampoo combined in the early 70’s. They were a dramatic flop! Ten years later most personal care manufacturers offered these products, and were met with huge success.

Following trends is a great way to understand how your customers are changing, but you need to also understand their speed of change to get your timing right.

It took Nespresso almost twenty years to become profitable for Nestle and Philip Morris has needed similar levels of patience in certain markets, before their most infamous of brands, namely Marlboro, took off.

How to innovate successfully

The ten reasons for innovation failure which I have mentioned, each have a number of solutions which you can use. Here are some ideas to get you thinking:

New process to innovate successfully

 

#1 The process: Introduce some creativity into the process. Use a virtuous circle as shown on the right, rather than the usual linear or funnel approach.

All innovation processes should start with a deep understanding of the potential customer segment and then insight development.

#2 Meeting company quotas: Instead of company quotas on the number or proportion of new product launches, a better target is a percentage of sales. This should eliminate all but the very best ideas, which are expected to increase sales rather than merely replace current products.

I also believe that it would be much better to seriously limit the acceptance level of new product ideas proposed in any year. This would be a case for quality over quantity and only the very best would get through the approval process.

This would also mean that brand managers would have to be assessed on sales performance and growth, rather than on the number of new products they launch.

#3 Lack of customer understanding: Steve Jobs is often quoted as saying

“People don’t know what they want until you show it to them.”

The best way to innovate successfully is to start by looking at the target customer’s lifestyle and seeing how you can make it easier and more enjoyable for them. If you already have a new product idea, then consider how it would make the customer’s life better. If it doesn’t, then you perhaps need to reassess its market appeal as it’s probably just a renovation.

Watching and listening to your customers with an open mind, rather than with your hypotheses in your head, will also enable you to identify pain points. The customer may even be unaware that they are compensating for something that they would change. What an incredibly valuable opportunity to offer a solution to them.

#4 Lack of category understanding: Never assume you are competing in a certain category until you have identified how your customers are choosing and what they are currently using. That is the way to identify your true competition.

I suggest using either a zooming in or zooming out technique from the current category, which I explain in our “I3 – Improved Ideation & Innovation” 1-Day Catalyst training sessions.

#5 Not living up to your promises: In today’s connected world, false or exaggerated promises are quickly identified and shared on social media. However, speaking about possible pain points you have identified and sharing your solution, will avoid your having to make any such misleading claims.

#6 Not being sufficiently differentiated: With such an abundance of information available to everyone, comparisons are easy to make. In fact, there are many websites which make a good living out of doing just that and then sharing their results.

Categories with little differentiation rapidly see that competing becomes largely price based. As a result, the products quickly become mere commodities. Better therefore to understand the category in which you are competing and its customers, so you can offer a point of differentiation. Solution based offers will always be able to charge more than product based ones. It’s up to you to decide which you want to do.

Solution based offers will always be able to charge more than product based ones. It’s up to you to decide which you want to be.

#7 Being too different: There are many startups today which offer only a few products or services. The successful ones have identified one or more pain points which the “big guys” have not, and take full advantage of them. In this case, their being different is a plus, because they offer the customer a solution.

However, for most brands, their problem is not being different enough, as mentioned above. It takes more than a new colour, aroma or packaging to be perceived as positively better than others. Identifying a sub-category of users with a precise need and then meeting that need better than anyone else is the more successful way to differentiate.

#8 Pricing yourself out of the market: Understand how much potential customers value your offer is essential to the success of any product. Getting it wrong can result in lost revenue or worse a promotional spiral leading to brand hell or commoditization. (read more about this in “Are you on the way to brand heaven or hell“)

#9 Inappropriate distribution: Appropriate distribution means being available where and when your customer is ready to buy. It also means reducing the effort needed for them to change their habits and buy your new offer. Trial will only come if you make it easy for customers to purchase.

This doesn’t mean being in stock everywhere at the lowest price. But it does mean being in the retail outlets that your target customers visit more often. Forget the exaggerated 100% distribution claims you used to get your new product line approaved; be selective in where you distribute, to attract your target customers first. The other customers will be your second priority as you get wider availability.

#10 Being too far ahead of the customer:  If you can’t afford to wait for your customers to catch up with your new product or service idea, then you should certainly reconsider your launch decision. Keep the concept in your “back drawer” and follow the societal changes of your customers, so you will be ready when they are.

Most organisations are working on multiple new concepts at the same time, each at a different level of preparedness. Trend following will allow you to identify when the customer is ready for each offer. This will avoid too early, as well as tardy launches.

Identifying relevant trends to follow will also enable you to plan a multi-national roll-out in a more solid foundation than mere geography.

These are ten of the most common reasons for new product launch failure and a few ideas on how to resolve each of them. Which do you think is most prevalent in your business? 

What are you going to change to increase the success of your future new product launches? Is it some other reason altogether, that I’ve missed? Let me know and share your thoughts below. 

I will be sharing more tips on innovation excellence in future blog posts, but in the meantime feel free to send me any questions you still have. I’m always ready to have a short Skype or phone call to assist you with your own brand building challenges.

If you enjoyed reading this article, please recommend and share it, to help others find it! Thanks.

C3Centricity used images from Wiley, C3Centricity online and “Winning Customer Centricity” in this post; it has been updated from the original first published in 2014.

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