HBR: Making Time to Really Listen to Your Patients

Do you think the following concepts around patient care can be applied to the building supply industry? What is the cost of hurried encounters with your customers? Below is a blog from the Harvard Business Review by Leonard L. Berry and Rana L.A. Awdish:

Making Time to Really Listen to Your Patients

Modern medicine’s true healing potential depends on a resource that is being systematically depleted: the time and capacity to truly listen to patients, hear their stories, and learn not only what’s the matter with them but also what matters to them. Some health professionals claim that workload and other factors have compressed medical encounters to a point that genuine conversation with patients is no longer possible or practical. We disagree.

Our experiences — as a critical-care physician whose own critical illness led her to train physicians in relationship-centered communication (Rana Awdish) and as a health services researcher who has interviewed and observed hundreds of patients, doctors, and nurses (Len Berry) — teach us that hurried care incurs hidden costs and offers false economy. In other words, it might save money in the short term but wastes money over time.

Why Listening Matters

Actively listening to patients conveys respect for their self-knowledge and builds trust. It allows physicians to assume the role of the trusted intermediary who not only provides relevant medical knowledge but also translates it into options in line with patients’ own stated values and priorities. It is only through shared knowledge, transmitted in both directions, that physicians and patients can co-create an authentic, viable care plan.

A doctor’s medical toolbox and supply of best-practice guidelines, ample as they are, do not address a patient’s fears, grief over a diagnosis, practical issues of access to care, or reliability of their social support system. Overlooking these realities is perilous, both for the patient’s well-being and for efficient delivery of care. We believe not only that a clinician should share medical decision making with the patient but also that it must occur in the context of an authentic relationship.

The Costs of Hurried Encounters

Compressed medicine has real risks. Clinicians become more likely to provide ineffective or undesired treatment and miss pertinent information that would have altered the treatment plan and are often blind to patients’ lack of understanding. All of this serves to diminish the joy of serving patients, thereby contributing to high rates of physician burnout. These consequences have clear human and financial costs.

The medical literature increasingly offers potential solutions to the inefficiencies that rob patients of physicians’ time and attention, including delegating lower-expertise tasks to non-physician team members, improving the design of the electronic health system, and greatly reducing the paperwork bureaucracy that adds little or no value. We can create more space for active listening. Unhurried medical care may be elusive, but it is practical.

Reimagining Roles

Beyond time pressures, the typically unquestioned roles that physicians and patients assume also inhibit relationship-building. In their medical training, physicians often are taught to maintain a clinical distance and an even temperament. They are warned not to get too close to patients, lest they internalize the suffering and shoulder it themselves. The best physicians, we know, reject this advice because it diminishes their humanity and disadvantages their patients, who need more than a highly-qualified body technician, especially when they’re seriously ill.

Patients learn roles, too: adhere to the doctor’s plan, squelch errant thoughts that might sound foolish, don’t ask too many questions, defer to the expert, be “a good patient.” In a new article we co-authored with others, we show that many patients, especially those with serious disease, behave like hostages in the presence of physicians — unwilling to challenge authority, understating their concerns, requesting less than they desire. Most physicians certainly don’t want patients to feel like hostages, but the patients often do. When patients feel like hostages, the ideal of shared decision making is a pipe dream.

It’s no wonder, then, that for patients with serious illness, the emotion they most often cite is “overwhelmed.” The diagnosis, the options, the treatment, the myriad side effects, the change in identity when living with disease — all of it can indeed be overwhelming. In this complex, fraught situation, people need a compassionate guide — a wise, comforting sherpa who knows the mountain, the risks of various routes, the viable contingency plans. The physician-sherpa should be a partner on the journey, not simply a medical operative, extracting formulaic rules and implements from a toolbox. Patients need and deserve much more.

When doctor and patient join forces, the team dynamic dismantles the harmful hierarchy. Both members of the dyad can rely on each other because neither owns all the data that matter. Speaking at a White Coat ceremony for medical students, Dr. Rita Charon, a pioneer in the rising discipline of narrative medicine, stated:

I used to ask new patients a million questions about their health, their symptoms, their diet and exercise, their previous illnesses or surgeries. I don’t do that anymore. I find it more useful to offer my presence to patients and invite them to tell me what they think I should know about their situation.…I sit there in front of the patient, sitting on my hands so as not to write during the patient’s account, the better to grant attention to the story, probably with my mouth open in amazement at the unerring privilege of hearing another put into words — seamlessly, freely, in whatever form is chosen — what I need to know about him or her.

An Organization that Listens and Heals

Not hearing the patient’s voice harms the patient and the clinician. They don’t have the benefit of pooled knowledge, ability to make fully informed mutual decisions, or time to build trust. Health systems that want to avoid those pitfalls need leaders who invest in shaping an organizational culture that values hearing patients’ voices. Here are some steps such organizations might take:

  • Share patient stories and related lessons at every meeting. Perhaps one should be a story of success (what we did well for a patient) and another of a failure (where we must improve).
  • Offer a communications curriculum to clinical and non-clinical staff. The professional development should be engaging and dynamic so that adult learners seek it out because they view it as worthwhile.
  • Encourage and reward clinical curiosity, whereby generous questions are asked to elicit generous patient responses. Emphasize listening for not just what is said, but also how it is communicated. Consider a narrative-medicine component.
  • Convene patient advisory boards that meet regularly with practice leaders to convey concerns and make suggestions about improving patients’ experiences.
  • Use multiple methods to identify and systematically address impediments in clinicians’ daily work — the “pebbles in the shoes.” Examples include rounds, conducted by senior leaders, with both staff and patients; staff focus groups and anonymous surveys; and CEO feedback meetings with small groups who speak openly about what prevents them from delivering better care.
  • Create a balanced scorecard of physician performance that tracks not only productivity but also professional development, team building, safety and quality metrics, timeliness of care or access, communication skills, and care coordination — measures that matter to patients.

A Way Forward

Medicine is constantly evolving as new ways to treat, heal, and even cure emerge. We must continually reflect on the changes, and correct the course as needed. This work cannot happen in a vacuum of forced efficiency. Physicians, patients, and administrators all must maintain and build on what is sacred and soulful in clinical practice. We must listen generously so that we nurture authentic, bidirectional relationships that give clinicians and patients a sense of mutual purpose that no best-practice guideline or algorithm could ever hope to achieve.

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Forrester: Become Customer-Obsessed Or Fail

Are you building a better customer experience with technology? Below is a blog from the Forrester by Michael Gazala:

Become Customer-Obsessed Or Fail

What’s the top imperative at your company? If it’s not a transformation to make the company more customer-focused, you’re making a mistake. Technology and economic forces have changed the world so much that an obsession with winning, serving and retaining customers is the only possible response.

We’re in an era of persistent economic imbalances defined by erratic economic growth, deflationary fears, an over-supply of labor, and surplus capital hunting returns in a sea of record-low interest rates. This abundance of capital and labor means the path from good idea to customer-ready product has never been easier, and seamless access to all of the off-the-shelf components needed for a startup fuels the rise of “weightless companies” which further intensify competition.

Chastened by a weak economy, presented with copious options, and empowered with technology, consumers have more market-muscle than ever before. The information advantage tips to consumers with ratings and review sites. They claim pricing power by showrooming. And the only location that matters is the mobile phone in their hand from which they can buy anything from anyone and have it delivered anywhere.

This customer-driven change is remaking every industry. Cable and satellite operators lost almost 400,000 video subscribers in 2013 and 2014 as customers dropped them for the likes of Netflix. Lending Club, an alternative to commercial banks, has facilitated more than $6 billion in peer-to-peer loans. Now that most B2B buyers would rather buy from a website than a salesperson, we estimate that one million B2B sales jobs will disappear in the coming years.

To thrive in the age of the customer, winning companies will embrace four mutually reinforcing market imperatives in order to become a customer-obsessed company: 1) For speed, tap into mobile connections; 2) For intelligence, set up systems to gather customer knowledge; 3) For impact, build a better customer experience; and 4) To become flexible, embrace digital transformation.

Most companies have made some progress on mobile, big data, customer experience, and digital transformation initiatives. But the most advanced companies — including McDonald’s in France, Home Depot, Salesforce and T-Mobile — truly embrace customer obsession when their strategies combine these mutually reinforcing imperatives.

Delta Air Lines recognized that improving customer experience – with a focus on eliminating cancelled flights – could make a world of difference in its business. Mobile apps for customers, flight attendants, and pilots streamline the experience for everyone. Making these applications sing required retooling back-end systems and led Delta to acquire staff and technology from travel technology firm Travelport. The result of this focus was a 13-point year-over-year jump in its Customer Experience Index score. Learn more about what Delta and other leaders are doing to thrive in the age of the customer in our new report, “Winning In The Age Of The Customer.”

Transforming a company to become truly customer obsessed is difficult. The four marketing imperatives are your path to success, and business technology (BT) powers the change. To thrive in the age of the customer, CMOs must partner with CIOs to advance the BT agenda, creating the technologies, systems and processes that increase agility, facilitate innovation and improve customer experience.

 

HBR: Shoppers Need a Reason to Go to Your Store — Other Than Buying Stuff

Does your store make small pickups a convenience? Should our building supply stores provide a compelling or memorable physical experience? How do you balance between time-well-saved and time-well-spent for your customers? Below is a blog from the Harvard Business Review by B. Joseph Pine II:

Shoppers Need a Reason to Go to Your Store — Other Than Buying Stuff

The holiday season, which is by far the most important time of year for retailers, highlights the increasingly intense battle between physical stores and online websites. Given the large number of casualties this year — witness the bankruptcy filings of such venerable institutions as Toys ‘R Us, The Limited, H.H. Gregg, Gander Mountain, Payless Shoes, and RadioShack, to name but a few — retailers must finally wake up to the core terrain over which they’re fighting: customers’ time.

Online retailers offer consumers time well saved. People can find what they want, when they want it, with incredible ease and convenience, and with the physical good shipped directly to their homes in a matter of days (and increasingly, in large cities, hours). As often as not, they don’t even have to pay shipping costs, and returns are a relative breeze. While the U.S. Census Bureau puts e-commerce’s share of the U.S. retail market at less than 10% as of the first quarter of 2017, online sales are growing at almost 10% per year. Should that trend continue — and it appears to be accelerating slightly — online retailing will account for nearly 20% of the total in 2025, over 30% in 2030, and about 50% in 2035.

To address this threat, one path physical retailers can take, of course, is to compete by going online themselves and even using their physical stores as a pickup spot — a strategy that many bricks-and-mortar retailers have taken. (One retailer I know saw a 35% bump in sales when it gave customers the option of picking up merchandise in its stores that they had bought online.)

But that alone will not save many retailers’ physical stores. They have to provide a compelling reason for consumers to visit them that online retailers can’t match. The best way is to compete on the basis of time well spent — to offer an experience so engaging that customers cannot help but spend time with you! And the more time they spend with you, the more money they will spend.

Consider what I think is the best new retail format in ages: Eataly. This Milan-based retailer (which so far has 13 stores in Italy, five in the United States, and five others in other countries) manages to combine all things Italian cooking into one amazingly engaging space: a café, one or more restaurants, a cooking school, and — especially — rows and rows of Italian groceries, kitchenware, and small appliances for sale. Consumers often spend hours there, and then memorialize their visit with photos posted to their Instagram feed or other social media outlets.

Many retailers (even banks) incorporate cafés to engage the senses and encourage consumers to linger, such as Restoration Hardware’s new 70,000-square-foot place in Chicago, which features a courtyard café, an espresso bar, and a wine room. Others, such as cosmetics retailers Lush and SABON, focus on getting consumers to experience their goods in the store, knowing that will increase the chances they will make a purchase.

Another approach is to focus on the story of each product, as happens in L’Occitane en Provence when customers encounter associates. Yet another way to offer time well spent is to stage special events, which even Walmart is doing this holiday season: It’s hosting 20,000 parties across its 4,700 stores, knowing that’s something Amazon cannot do. The Christmas season, of course, furnishes the perfect time-tested tactic that has worked for decades for department stores: Santa Villages and other Christmas extravaganzas for which people gladly pay to give their kids a festive experience.

Interestingly, many of the most engaging retail experiences have come from manufacturers. There’s American Girl Places, which immerses girls in its doll’s stories; Nespresso Boutiques, which lets people experience its espresso machines before they buy them; LEGO Stores, which feature play and building; and, of course, Apple Stores, where every product is live and workshops offer skills, “geniuses” offer support, and sessions offer inspiration. (Even Starbucks started out as a manufacturer before Howard Schultz turned it into an experience stager.) And recognizing the demand-generating power of physical engagement, numerous online retailers have opened up their own bricks-and-mortar stores; examples include Warby Parker stores, Bonobos Guideshops (bought by Walmart), and mass customizer Indochino Showrooms.

Those that are best at staging experiences have even figured out that when consumers truly value the time well spent they encounter in these places, the retailer can charge for that time via an admission or membership fee. Billed as the world’s most beautiful bookstore, Livraria Lello, in Porto Portugal, charges an admission fee of €3 just to enter the store — and then consumers get that money back if they make a purchase. Universal CityWalk in Hollywood charges from $5 to $50 (depending on location and time of day) per vehicle — not for parking per se but specifically to send the signal that it is a retail place worth experiencing.

Generally, though, retailers charge for particular experiences within their stores and do not charge for admission to their stores. American Girl charges for its café experience, a photo shoot and magazine cover, and even a doll hair salon experience (not to mention birthday parties that can run into the thousands of dollars). Recreational Equipment Inc. (REI) charges customers $20 to $40 to tackle the 60-foot climbing walls and structures it has in its flagship stores, offering instruction and also essentially getting customers to pay to try out its mountain-climbing equipment. And the Mall of America charges for the various rides in its Nickelodeon Universe theme park in the middle of the mall.

Wingtip, a men’s store in San Francisco, doesn’t charge for the retail experience — as engaging as it is, with superb merchandising of clothing, including a bespoke experience, plus wine and spirits, cigars, and a barbershop fulfilling its theme of “Solutions for the Modern Gentleman”; instead it created the Wingtip Club in the top two stories of its building for which it charges membership fees. The club is a refuge from the bustle of the city, with a lounge, bar, game room, whiskey corner, and golf simulator; members spend hours at a time there. The price of a membership is a $3,000 initiation fee and then $200 per month for unlimited access. All members (men and women) receive a 10% discount on merchandise.

There will always be physical stores for pickup convenience and the commoditized or very inexpensive merchandise like Dollar Tree stores sell. But providing a compelling or memorable physical experience is a different strategy that can work. Physical retailers must choose between time-well-saved and time-well-spent strategies. Whatever they do, they should be careful not to choose a middle-of-the-road approach that fails to excel at either.

Original Page: https://hbr.org/2017/12/shoppers-need-a-reason-to-go-to-your-store-other-than-buying-stuff

 

HBR: Listening to Your Customers When Your Customers Disagree 

What should you do when customers have conflicting opinions? Are you listening to social media channels? Below is a blog from the Harvard Business Review by Alexandra Samuel:

Listening to Your Customers When Your Customers Disagree 

Smart companies recognize that both their marketing and their broader business strategy need to be informed by carefully gathered customer insight. But what do you do when your customers disagree—especially if their disagreement echoes throughout your various social media channels? What if their needs or desires are mutually contradictory?

That’s the situation the airline industry may soon face, thanks to the FCC’s reconsideration of in-flight mobile phone use. Customers have long been clamoring for in-flight phone liberation, but since its announcement the FCC has also been flooded with comments from passengers who dread the prospect of noisily chatting seat mates. Should the FCC move away from its pervasive ban on in-flight phones, those conflicting views will become a problem for individual airlines—or even individual flight attendants.

When you’re faced with a decision that’s going to make some customers angry no matter what you choose, it’s hard to know which voices to listen to, or whether to listen at all.

There is no more valuable time to listen to your customers than when they disagree, however. If you take the time to dive deep into a controversial topic—ideally with a group of customers who have been providing ongoing input into your business—you have a better chance of identifying strategies that will either help you satisfy competing interests, or focus your attention on the most crucial customer groups.

In a survey of 1,014 Americans who weighed in on the topic last month(January 2014), we heard the following about mobile phones on airplanes:

  • 44% of respondents agree that the FCC should permit the usage of cell phones on planes in flight, while 45% oppose the idea.
  • 40% of respondents say they would be very likely or somewhat likely to choose airline carriers based on their in-flight mobile use policies. Of these, the majority (54%) would choose a phone-fee carrier; 29% would choose a phone-friendly carrier, and 17% would prefer a carrier with lower mobile rates for in-flight phone use.
  • 55% say the regulation of phone usage should be a joint responsibility of both airlines and FCC. Only 12% thinks it should be the exclusive responsibility of the FCC, while 15% thinks the airlines should establish the guidelines.

These survey results reflect the public divide on this issue—and also show that rules on cellphone usage can indeed sway people’s ticket-buying decisions. If you’re in the airline industry, you better be tuned in to your customers.

So what should a business do when customers have conflicting opinions? Often the answer lies in looking more closely for nuances and patterns other than the overarching disagreement. For example, our data shows that while customers are divided on the issue of whether cell phone use should be permitted in flight, they do agree on some issues. Most notably, a full 70% think that airlines should have at least partial responsibility for determining the guidelines, so airline carriers can’t stand on the sidelines and let the FCC sort it all out.

Here are best practices to help you find the best path forward among your battling customers—and that could help airlines navigate through this turbulent issue:

Find a middle ground. While the public is evenly divided on whether cellphone use should be allowed in flight, most passengers (80%) object to voice calls. At the same time, most would-be in-flight cell users primarily care about texting (72%) Internet access (69%), and email (65%); only 28% are interested in making voice calls.

Almost half (43%) of all respondents think that if cell phones are allowed in flight, it should be for data use only, and only 18% think phone use should be totally unlimited. Allowing data in flights but not calls therefore appears to be a potential middle ground.

Figure out which groups of customers feel which way. Only 25% of would-be in-flight talkers say they’d be prepared to pay roaming rates for in-flight phone or data use. But if these consumers fly more frequently than other consumers, it still might make business sense for airlines to try to meet the needs of these consumers. They should explore providing different offerings for different groups. Failing that, they will need to determine who their most valuable or strategically important customers are and target their approach accordingly. If they know that some customers are alienated by phone use, but others are prepared to pay richly for the privilege, you can at least make an educated decision.

Educate the opposition. While the overwhelming reason (80%) for opposing cellphone use in flights is that people don’t want to hear other people’s calls, half of those who disagree with in-flight phone use also worry about safety (54%). These stats suggest education on actual risks could soften opposition. If you end up making a decision that you know will make one set of customers unhappy, look for opportunities to change their minds. For example, the data-only solution may still make customers unhappy if they are worried about safety, but evidence suggest that the risks are low , so airlines may find that passenger education can relax some of those worried opponents.

Equip your employees. Flight attendants are right to worry about what cell phones would mean for their workload: 55% of people who believe in setting some limits on in-flight phone use think flight attendants should be the ones to help enforce those limits by warning violators. While many also think that signage (44%) and signal jamming (41%) should be part of the picture, there is clearly a widespread expectation that flight attendants will be a key part of enforcement. This highlights the need to educate your people in the front lines: Whichever consumer group you end up siding with, equip your employees (including your social media community managers) with the information and the tools they need to answer people’s questions and address opposition to your decision.

Ultimately, any business dealing with conflicting customer opinions will have to understand the factors driving people’s attitudes. Should the FCC change its rules on in-flight phone use, the airlines that will benefit will be those that understand not just the broad dimensions of disagreement among their customers, but the specific preferences, concerns and purchasing patterns of each group—otherwise they will be flying blind.

 

HBR: Selling Products Is Good. Selling Projects Can Be Even Better

As building suppliers, we tend to focus on bigger projects such as new homes and commercial buildings. Is your company or yourself focusing on small projects? Are you helping your customers complete their projects? Below is a blog from the Harvard Business Review by Antonio Nieto-Rodriguez.

Selling Products Is Good. Selling Projects Can Be Even Better

In the beginning companies sold products. And then they sold services. In recent years, the fashionable suggestion has been that companies sell experiences and solutions, solving the needs and aspirations of customers.

Companies, indeed, do all of these things. But increasingly, what companies sell are projects. To understand the difference, think of an athletic shoe company, such as Nike or Adidas. A focus on products means a focus on selling running shoes. A focus on experiences might mean they sell you a membership to a local running club. A focus on solutions might mean they figure out how to help you reach your goal weight. While these clearly offer more value than simply selling you a pair of shoes, they also have limitations. Selling products limits the revenues you can make from clients: Unless you are innovating and continually updating your product offering, customer attrition tends to be high, and incentivizing repurchases can be hard. Selling experiences provides intangible benefits that are hard to quantify and measure, often focusing on meeting the needs of one single customer, preventing any mass production. Selling solutions became popular in the early 2000s when customers didn’t know how to solve their problems. But today, in the internet age, people can do their own research and define the solutions for themselves.

A focus on selling projects would mean helping someone do something more specific, such as running the Boston Marathon. Nike could provide you with its traditional sports gear, but in addition it could include a training program, a dietary plan, a coach, and a monitoring system to help you achieve your dream. The project would have a clear goal (finish the marathon) and a clear start and end date.

And that is just one type of project. More so than products, the possibilities with projects are endless.

From Products to Projects at Philips

Consider the evolution of Philips. Founded in Eindhoven, in the south of The Netherlands, in 1891 by Gerard Philips and his father Frederik, it began by producing carbon-filament lamps. Its success was achieved by a culture of innovation and the speedy introduction of new products. Over more than a century of profitable existence, the range of products offered by the company has mushroomed. Today, Philips produces everything from automated external defibrillators to energy-efficient lighting for entire cities. It even applies its smart sensor technology to teeth brushing.

This profusion of products means that Philips is cash-rich, yet sales have stagnated in the last decade, and concerns about the company have been reflected in its stock price. Faced with this changing reality, Philips took a long, hard look at itself. It identified the absence of focus and lack of strategy implementation capabilities as crucial elements that needed addressing. Five years ago, with intensifying competition, the Philips board split the organization into three different companies: Consumer Health, Lighting, and Healthcare.

It then went on to launch “Accelerate,” a program aimed at accelerating growth by transforming each new independent company into a focused organization. At the heart of the changes brought about by the Accelerate program are projects.

Over the years, Philips had become an intricate, blurred matrix. Accountabilities and responsibilities were shared between products, segments, countries, regions, functions, and headquarters. It set out to simplify this convoluted and archaic organization structure.

To do so, Philips put projects center stage. Projects were identified as the best management structure to break up silos and encourage teams to work transversally (end-to-end) in the organization.

As part of this, Philips Health Tech was divided into just three divisions. Essential to making this happen was a substantial increase in the work executed through projects. The shift was from selling customers a few products every year to creating an engaged relationship over decades.

One of the biggest challenges facing Philips Health Tech is that the life expectancy of its products is becoming shorter and shorter. Soon after launch, products are copied by the competition, which means they must be priced more cheaply. Soon, they become a commodity. This removes any opportunity for steady, high margins over the long term. Philips has experienced this even with its high-end health care products. Shifting its emphasis to selling projects rather than products was a strategic response to this problem.

For example, Philips sells high-tech medical devices. In the past it sold them simply as products (and it still does). But now Philips seeks out the projects in which its products will be used. If a new health care center is being considered, Philips will seek to become a partner from the very beginning of the project, including the running and the maintenance of the new center.

Among the results of this project focus at Philips is a partnership with Westchester Medical Center Health Network aimed at improving health care for millions of patients across New York’s Hudson Valley. Through this long-term partnership Philips provides WMC Health with a comprehensive range of clinical and business consulting projects, as well as advanced medical technologies such as imaging systems, patient monitoring, telehealth, and clinical informatics solutions.

In similar long-term partnerships with Philips, hospitals have been able to significantly improve radiology volumes and cut MRI waiting times in half. These organizations are seeing a 35% reduction in technology spending while improving clinical quality.

The Project Revolution

Philips is not alone in using an increased focus on selling projects as a means of disruptive transformation. At Microsoft, the company’s entire focus has shifted to Cloud services, most of which are offered as projects. It now has around 10,000 operating projects. Airbnb, valued this year at $30 billion, recently announced that it will start selling “experiences” — small tourism projects — as a way to create new revenue streams and address the increased regulatory scrutiny in some of its bigger markets. The biopharmaceutical industry is also seeking to work with governments and other purchasers on focused treatment programs, rather than simply offering individual drugs.

Clearly, the shift to becoming a project-driven organization and selling projects rather than products or services presents sizeable challenges to corporations and their business models. Working in projects throughout my career, I have identified these as the important ones:

  • Revenue streams. Revenues will be generated progressively over long periods of time, instead of right after the sale of a product. This will affect the way revenues are recognized, as well as accounting policies and the overall company valuation.
  • Pricing model. New pricing models will need to be developed. It is easier to price a product, for which most of the fixed and variable costs are known, than a project, which is influenced by many external factors.
  • Quality control. Delivering quality products will not be enough to meet customer expectations. Implementation and post-implementation services will also have to be of the highest possible quality to ensure that clients continue to buy projects.
  • Branding and marketing. Traditional marketing has focused on short-term immediate benefits. Marketing teams will need to promote the long-term benefits of the projects sold by the organization.
  • Sales force. The buyer of the project will no longer be the procurement department of an organization. Sales will be pitched to leaders of the business, so the sales force and sales skills will have to be upgraded with strategy and project management competencies.

Stop for a moment and consider what your organization is selling. Is it a project? Increasingly, the answer is clear and affirmative. If not, beware, your products might soon become part of a project sold by someone else.

 

HBR: The Most Common Reasons Customer Experience Programs Fail

What are your Costs-to-Acquire, Customer Penetration, and Customer-Lifetime Value? Do you have a Customer Experience strategy? Below is a blog from the Harvard Business Review by Ryan Smith and Luke Williams.

The Most Common Reasons Customer Experience Programs Fail

Most customer experience (CX programs) are positioned as strategic, but quickly veer away from business objectives and become simply about tracking CX metrics. Time passes slowly, data continues to mount, and paralysis sets in. Big, strategic goals evolve into score improvements and incrementalism instead of gleaning useful insights that allow change with confidence.

So where does it all go wrong?

Most CX programs are broken in similar ways:

  1. They are not designed with change or innovation in mind.
  2. They have “soft” metrics rather than real business goals.
  3. They move slowly and without purpose.

Mistake #1: Forgoing change and innovation

Ask your CX program leader about the purpose of the program. If the answer is something other than, “So we can make intelligent changes that benefit the customer and the business,” you may have a serious issue. CX programs must be about change.

At the most rudimentary level, basic programs track performance over time. Yes, that’s useful, but why is it important? Because you want to improve over time. This means you must do things differently than you did them before. While it’s not complicated, this is a frequently overlooked premise to having a CX program—it’s about change.

Effective CX programs prioritize the importance of what gets measured and stack those data against your desired outcomes—what’s called “driver analyses.” Good driver analyses unlock the method for having the most change in the fewest possible moves.

While executing driver analyses enables change, it’s not actual change. It’s just more data until you do something with it. The reasons change doesn’t often happen are reporting paralysis, the lack of “think time,” and failure to collaborate.

Reporting paralysis can occur when teams are so wrapped up in distributing data, ensuring data quality, or writing up insights that they forget the purpose of data. If you “measure everything and report everywhere,” you’re not being strategic with your data.

Building in “think time” can help with this. Instead of just measuring, manufacturing, and distributing, build in time to understand the implications and applications of the data. This will give you clarity and confidence in what you’ve seen, how the pieces of the puzzle fit together, allow hypotheses to be formed and plans for change to be made.

Collaboration is also important if CX is going to result in any real change. CX experts must work with other departments and stakeholders to push the agenda for customer-focused improvement. Yes, it’s hard to do this when no one has time to meet, much less collaborate. But the CX program is uniquely positioned to try to make this happen anyway. They own the customer, they’re the advocate, and they have the analysis. Most importantly, the CX program reminds everyone else why they have to make time for the customer, above all else.

Mistake #2: Linking metrics to business outcomes

Most CX programs use their own tracking measures as emblems of success or failure. If a score improves, that number is heralded and CX teams use it as evidence of innovation and improvement by the team. Often, these results are accepted at face value.

But the problem with this approach is you really can’t control for all other things that could cause scores to rise, and you can’t assume that a rise in scores is good for net revenue. When it comes time to set key performance indicators (KPIs) for the program, be sure to match them up against input from both your CMO and your CFO.

What are the kinds of things you might want to consider? Here are some examples:

  1. Cost to Acquire and Serve a Customer (CAC and CSC): The better you understand your customer and prospect base, the more you build experiences and services they crave, the lower your CAC and CSC should be.
  2. Customer Penetration and Share: Customer penetration is simply increasing the number of customers you have. Share of wallet is the ultimate measure of how they spend their money when the ultimate point-of-sale (POS) decision occurs. Study the drivers and barriers of both to optimize here.
  3. Customer Lifetime Value: This is the net present value of all future customer revenues with account for attrition and your discount rate. It’s a complex measure, but the best firms understand it and make it a central part of their scorecard.
  4. Customer Churn: A well-run CX program can contribute to gains against customers shifting away from your brand (attrition) or abandoning it altogether (defection).

There is place in the world for performance benchmarking survey metrics like net promoter score (NPS). Many firms aren’t sufficiently sophisticated with respect to the above measures, so measuring NPS or other metrics may be the only empirical evidence available. When this is the case, though, be certain to study KPI success or failure with caution. A satisfied customer is not necessarily a profitable one.

Mistake #3: Moving slowly, without purpose

A CX program is a living, breathing thing. It’s either in a state of growth, peak productivity, or decline. CX programs are like mountain climbing — if you aren’t confidently moving through the problem, you may be wasting valuable energy trying to figure out where you’re going.

While it’s critical that CX programs be well designed and methodologically sound, sometimes wasteful activities are allowed to creep into the design process and bog down the program. Lack of momentum and sluggishness spell doom to a CX program, and leadership must propel the program.

True CX leadership comes from:

  1. Ownership. There must be a program owner: a single person who is ultimately responsible for the success and quality of the program.
  2. Expertise. The leader doesn’t have to know everything about the business, research methods and analytics, or strategy to be effective. But the more they know about each, the more effective the program will be.
  3. Resources. Multi-million dollar budgets aren’t necessary to create or capture value. Start with a basic budget commensurate with those of an IT program. Let them demonstrate value to earn more resources.
  4. Empowerment. Give your leader the authority to be successful.

Going slowly when you don’t intend to is clear evidence that the program has slipped into neutral in the leadership camp.

There are many obstacles and detours that can prevent full ROI from your CX program. In our experience, these three are the most common. To avoid them, remember that CX programs are not merely about watching scores go up and down. The goal is to create experiences that add value to the customer and the firm simultaneously, and this requires constant change. So think about what ideal experiences you want customers to have, and work backwards from there. Work quickly. And re-invent as needed.

Original Page: https://hbr.org/2016/12/the-most-common-reasons-customer-experience-programs-fail

 

HBR: Don’t Persuade Customers — Just Change Their Behavior 

“If you are a company, you might think it would be easy to sell this person a solution to their problem. However, it’s not as easy as that – there are deeply ingrained habits here that won’t just go away.” What are you doing to motivate the consumer to change their behavior?  Below is a blog from the Harvard Business Review by Art Markman:

Don’t Persuade Customers — Just Change Their Behavior 

Most businesses underestimate how hard it is to change people’s behavior.  There is an assumption built into most marketing and advertising campaigns that if a business can just get your attention, give you a crucial piece of information about their brand, tell you about new features, or associate their brand with warm and fuzzy emotions, that they will be able to convince you to buy.

On the basis of this assumption, most marketing departments focus too much on persuasion.  Each interaction with a potential customer is designed to change their beliefs and preferences.  Once the customer is convinced of the superiority of a product, they will naturally make a purchase. And once they’ve made a purchase, then that should lead to repeat purchases in the future.

This all seems quite intuitive until you stop thinking about customers as an abstract mass and start thinking about them as individuals.  In fact, start by thinking about your own behavior.  How easy is it for you to change?

Consider your own daily obsession with email and multitasking.  Chances are, you check your email several times an hour.  Every time you notice that the badge with the number of new emails has gotten larger, you click over to your browser, and suddenly you are checking your emails again.  This happens even when you would be better off focusing your efforts on an important report you are supposed to be reading or a document you should be writing.  You may recognize that multitasking is bad and that email is distracting, but that knowledge alone does not make it easy to change your behavior.

If you are a company, you might think it would be easy to sell this person a solution to their problem. However, it’s not as easy as that – there are deeply ingrained habits here that won’t just go away.

Let’s go through some of what is required to create different habits.  The point is to recognize how much work goes into changing behavior.

First, you have to optimize your goals. Many people err in behaviors like email by focusing on negative goals.  That is, they want to stop checking their email so often.  The problem with these negative goals is that you cannot develop a habit to avoid an action.  You can only learn a new habit when you actually do something.

For marketers, this means focusing on how to get consumers to interact with products rather than just thinking about them.  As an example, our local Sunday newspaper often comes in a bag with a sample product attached that encourages potential consumers to engage with products.

Second, you need a plan that includes specific days and times when you will perform a behavior.  For example, many people find that they work most effectively first thing in the morning, yet they come to work and immediately open up their email program and spend their first productive hour answering emails (many of which could have waited until later).  So, put together a plan to triage email first thing in the morning and answer the five most important emails and leave the rest until later in the day.

Now that many people have calendar apps that govern their lives, it gets easier to put things on people’s schedule to keep them engaged with a business.  For example, services from hair salons to dentists can schedule appointments and send an email that links to Outlook and Google calendars.

Third, you need to be prepared for temptation. Old behaviors lurk in the shadows waiting to return. If you have an important document to read, and you know that you will be tempted to check your email, find a conference room in the building and use that as a home base away from your computer to get your reading done.

To keep customers from falling back into the “bad habit” of stopping off at the drugstore for oops-we-ran-out-of-it products like laundry detergent or diapers, Amazon makes it easy to schedule regular shipments right to your home. You never need to stop at the drugstore again – or even to remember to check how much laundry detergent is left in the bottle.

Fourth, you need to manage your environment.  Make the desired behaviors easy and the undesired ones hard.  If you want to avoid multitasking, then remove as many of the invitations to multitask from your IT environment.  Close programs (like Skype) that have an IM window.  Only open your email program at times of the day when you are willing to check email.  Shut off push notifications on your phone when you have an important task to complete.

Marketers need to work with their designers to come up with packaging that encourages consumers to put the product into their environment. As I discuss in my book Smart Change, Procter & Gamble helped increase sales of the air refresher Febreze by redesigning a bottle that originally looked like a window cleaner bottle (and cried out to be stored in a cabinet beneath the sink) to one that was rounded and decorative (and could easily be left out on a counter in a visible spot).

Finally, you need to engage with people. Many people feel pressure to accomplish important goals alone, but there is no shame in getting help from others.  Find productive people within your organization and seek them out as mentors to help you develop new habits.

The “positive peer pressure” technique is frequently used in service companies and organizations like Weight Watchers and Alcoholics Anonymous, but can be used by any business that’s trying to encourage repeat visits. For instance, a fitness center might offer a few free or discounted personal training sessions to new members to help them get in the habit of working out – and making them less likely to quit.

None of these factors works by itself.  You need to create a comprehensive plan to change your behavior.  Otherwise, the constant temptations to multitask will sap your productivity despite your best intentions.

This same set of principles applies for marketers.  No matter how motivated consumers may be to try your product or service, or how unhappy they may be with their current situation, if you do not focus on a comprehensive plan for changing their behavior, then you are unlikely to have a significant influence on them.

Your business will not succeed just by trying to change attitudes and preferences.  You will succeed by helping people to develop goals, create plans, overcome temptations, manage their environment and engage with others.  You will influence your customers only when you give them as much support as you would need to change your own behavior.