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.

 

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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: Let Your Frontline Workers Be Creative

“The researchers found that the creativity of front-line service employees directly affected customer services ratings.” Are you facilitating creativity in your employees? Below is a blog from the Harvard Business Review by David Burkus,

Let Your Frontline Workers Be Creative

We know that creativity and innovation fuel new products, services, even strategies. But too many executives make the mistake of assuming creativity is just reserved for a certain department or just the white-collar knowledge-workers in their firms. New research shows how important it is for all employees to be creative, even if they’re not high up on the org chart.

One new research paper looked at how creativity, or the lack thereof, affected customers’ perception of customer service. The researchers found that the creativity of front-line service employees (which they called “service creativity”) directly affected customer services ratings. “Service creativity allows employees to delight customers in unusual ways or solve problems that existing protocol falls short of addressing,” said Jing Zhou, a co-author on the study and professor of management at Rice University. “The findings suggest that service creativity is a powerful avenue through which customer satisfaction can be achieved.”

The collaborators collected data from 3,550 customers and 380 hairstylists across 118 hair salons as part of a large chain in Taiwan. While that may sound like an odd source for customer research, it is actually a perfect setting for studying service creativity. The researchers chose it because generating novel yet practical hairstyles for a diverse set of customers is a fundamental skill needed by stylists. In addition, the interaction between stylists and customers lasts long enough to study the interaction between employee and customer and observe the employee’s creative performance. The data were collected through observations by the researchers and surveys completed by both the employee and the customer. (The researchers limited themselves to two interactions per stylist per day in order to avoid response fatigue.)

They found that the service employees were rated both more positively and more creatively when they showed customers they were responsive to feedback. But it wasn’t just about making the customer feel good by being approachable – it was about gaining actual insights and ideas from customers, which in turn allowed the employee to promote new options and solutions tailored to the customer. “Because front-line employees engage in contact with customers on a daily basis they may have a better sense of the issues that customers are concerned about and how to solve these problems in a novel and practical way,” said Zhou.

Managers can play a key role in facilitating the creativity of front-line staff by expressing confidence in their service employees and seeking out employees’ opinions on resolving customer issues or providing service.

This stands in contrast to how many customer service departments operate, especially call centers where employees follow standardized flow charts and are encouraged to close customer support tickets and end phone calls as quickly as possible. “Empowering employees — rather than closely monitoring and controlling them – may be a more effective way to enable employees to provide satisfying service,” said Zhou.

The exemplar here is Zappos. Unlike most online retailers, Zappos actively drives customers to contact them via phone, displaying their customer service number prominently throughout their website. Employees receive seven weeks of customer service training. Instead of giving employees scripts, managers encourage call center employees to go to whatever lengths are reasonable and necessary to please customers, including browsing competitor websites if a customer is looking for a specific item that Zappos doesn’t have. One time, when Zappos was out of stock, a customer service representative even visited a brick and mortar retailer to buy the specific shoes and hand-deliver them to a customer.

Especially notable from a service creativity standpoint, Zappos is one of the few call centers that measures average call time but doesn’t reward employees with the lowest averages. Instead, they praise the employees who set length records. That’s important given that creative ideas often take time to develop and that productivity and creativity are often at odds with one another.

While stories about Zappos and extreme tales of customer service aren’t new, this new research helps strengthen the case that it’s not just about doing it differently … service creativity helps companies do it better. Today, creativity is everyone’s job.

 

HBR: Everyone Says They Listen to Their Customers—Here’s How to Really Do It

Are you measuring your customers’ experience? Below is a blog from the Harvard Business Review by Ana Brant.

Everyone Says They Listen to Their Customers—Here’s How to Really Do It

Almost everyone in the luxury service industry talks about “listening to the voice of the customer.” But listening is not the same as understanding. How you listen, and to whom you listen, is critical. Even a smart, high-end business can be led astray by misunderstanding the strengths and weaknesses of different customer feedback channels.

In this piece, I’ll lay out a few of the strengths and shortcomings of a few of the more common channels, based on my experience as global director of guest experience and innovation at the Dorchester Collection of luxury hotels.

Mystery shopper ratings

One ubiquitous tool for evaluating the quality of the customer experience in service industries is the mystery shopper. The mystery shopper plays the role of a customer, evaluating service on a checklist of criteria. With these checklists, mystery shoppers measure compliance to a set of standards related to physical attributes and service delivery. Your own company or an external evaluator (such as AAA or Forbes Five Star) may set these standards. Mystery shoppers are best for measuring efficiency — but not experience.

One checklist measure in the hospitality industry, for instance, is how promptly a guest is greeted upon arrival in the lobby, and whether she is greeted by name. But in this era of heightened sensitivity to privacy, does that always make sense? Suppose we’re talking about a luxury hotel guest who is a paparazzi-shy celebrity? A mystery shopper report would never alert me to the receptionist who had the good sense not to speak that guest’s name out loud.

A mystery shopper’s report is an important tool to help us deliver efficient service. But it’s equally important for my team to remember that a checklist, which tends to reward repetitive behaviors, cannot encompass everything we hope to be.

Opinion surveys

This is the easiest feedback channel to misinterpret, for luxury businesses and others. Results are best when it’s a scientific survey built on a proven customer-engagement methodology. One survey we recently did helped us distinguish between what business and leisure travelers look for in a hotel. It told us that we needed to work on winning back a greater proportion of business travelers as leisure guests, and positioned us to increase that by 6% over the following six months.

However, beware the opposite. A quick online survey (à la Survey Monkey) can set a luxury organization into fire-fighting mode about a one-off problem that’s not a true trend. Also, this data can be interpreted — and manipulated easily – by managers, to fit any agenda.

Social media feedback

Many businesses track Twitter and Facebook as measures of how well they are doing on customer service. For luxury brands, social media posts serve one main purpose — as online postcards.

When we looked closely, we found our guests most often use these channels to brag that they have stayed with us. What can we do with that sort of feedback? A lot. These insights don’t tell us about our customer service performance, but they can inform our marketing and customer experience strategies. For example, we see meal pictures showing up frequently on Instagram. So a question we can ask about a luxury room service meal is, is the presentation Instagram-worthy?

Looking at a series of posts from customers can also remind us of what differentiates us from our competitors: afternoon tea at The Dorchester and the soufflés at The Beverly Hills. At Hotel Plaza Athénée in Paris, for instance, guests find a high-end fluffy robe and slippers – with a twist. The slippers have red soles, like Christian Louboutin shoes. We learned via social posts that guests love this touch (especially those who remember Carrie Bradshaw’s fashionable stay there during the last two episodes of Sex and the City).

Social and review posts can also deliver “aha” moments about competitors’ offerings. For example, are luxury hotels delivering the same items – say cake and champagne – to special occasion guests? If so, you can strive for something more distinctive.

Social media is best for discovering what customers really value about their luxury experience with you. This information shapes customer experience strategy. Of course, they can also provide early warning signals that service has slipped. If your social media posts read like comment cards, that’s an alarm bell.

Review sites

In our industry, it is a common misperception that the review sites are used only to find deals. That has led some luxury service providers to discount them. True, not everyone on a review site will be your target customer. However, we’ve learned that many luxury shoppers use sites such as TripAdvisor to validate their choices prior to making a final decision, and browse our reviews and those of our direct competitors. That’s a customer we certainly want to win, so our managers respond to TripAdvisor reviews. Sometimes, this also presents a bonus opportunity to turn a one-time guest into a repeat customer.

Sites such as TripAdvisor can also help identify gaps in what you think is important to customers vs. what customers say is important. While surveys only tell us what we think we want to know and social posts often showcase the best highlights of a guest experience, review sites highlight our blind spots. And when customer reviews include images, they show our products and services through our customers’ eyes, not how professional photographers pose and light them for our website. This can be a reality check for us.

They can also help you look into your competition’s customer experience. Ask this key question: What do you have that customers love — and your competitors lack?

First-hand observations

It’s also valuable to learn when your own eyes trump all. One of the most powerful and often underappreciated tools for improving service and performance is direct observation. Sit in the lobby and see how staff members greet guests, how traffic flows through registration, and how well people work together. Someone in the luxury car business could apply the same principle to seeing what really goes on in the showroom, or in the sales manager’s office.

Luxury innovations usually come from understanding and addressing new needs. For instance, while sitting in the lobby of The Dorchester, members of my innovation team observed guests walk to the theater desk to book tickets for a West End show, and then go to the Concierge Desk to arrange for dinner reservations and transportation. Why, they asked, should guests have to go to two desks to arrange one evening? Now the theater desk staff make all the arrangements a guest might need. I am not sure we would have discovered that less-than-seamless service issue any other way than by sitting in the lobby and watching.

While auditing and measuring the customer experience, remember the ultimate goal is to gather information that helps deliver a level of customer service that differentiates your business. Do not expect technology-driven and repetitive checklist-style evaluations to find it for you.

The new consumer decision journey

Are you using customer journeys as a competitive advantage? Below is a blog post from McKinseys & Company and Harvard Business Review by David Edelman and Marc Singer.

The new consumer decision journey

For years, empowered consumers have held the upper hand when it comes to making purchasing decisions. But companies are fighting back.

The flare-up around advertising blockers on mobile devices is just the latest salvo in the digital-technology “arms race” that has made today’s consumer a formidable force. From social media to mobile devices, technologies have given consumers unprecedented power to compare prices, complain loudly, and find the best deals.

This tipping of the balance of power in favor of consumers has been evident for years. In 2009, we declared that the traditional “funnel” model—in which consumers began with a set number of brands in mind and whittled them down until they decided what to buy—had been usurped by what we called “the consumer decision journey.”1 See David Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik, “The consumer decision journey,” McKinsey Quarterly, June 2009. This journey involved shoppers taking advantage of technology to evaluate products and services more actively, adding and removing choices over time. And it included a feedback loop, where customers kept evaluating products and services after purchase, pressuring products to perform and brands to deliver a superior experience on an ongoing basis.

We now believe the consumer decision journey needs updating.

In the past few years, brands have been playing catch-up, investing in new technologies and capabilities in a bid to regain relevance with shoppers and exert greater influence over how they make purchasing decisions. Our experience advising more than 50 companies and researching more than 200 on best practices for building digital capabilities—coupled with detailed conversations with dozens of chief digital officers and more than 100 digital-business leaders worldwide—has convinced us that brands today can not only react to customers as they make purchasing decisions but also actively shape those decision journeys. A set of technologies is underpinning this change, allowing companies to design and continuously optimize decision journeys. More important, companies today can use journeys to deliver value to both the customer and the brand. Companies that do this well can radically compress the consideration and evaluation phases—and in some cases even eliminate them—during the purchase process and catapult a consumer right to the loyalty phase of the relationship (exhibit). The journey itself is becoming the defining source of competitive advantage.

Exhibit

The new consumer decision journey

In fact, a recent Association of National Advertisers survey2 The survey was completed by a total of 384 client-side marketers. Participants include members of various panels, including the Association of National Advertiser’s (ANA) Marketer’s Edge Research Community, ANA members and prospects, the American Marketing Association, Demand Metric, McKinsey, and Spencer Stuart. Findings from the survey will be available in “The marketer strikes back,” forthcoming on the McKinsey on Marketing & Sales website. found top performers understood the entire customer journey much better than their peers (20 percent versus 6 percent) and had much better processes for capturing insights about customers and feeding them back into their marketing programs to improve performance (30 percent versus 11 percent). They also valued automation as a critical capability to respond to disruption and deliver both consistent and personalized customer experiences (30 percent versus 11 percent).

We’ve found that a company’s ability to deliver that value relies on four distinct but interconnected capabilities:

  • Automation streamlines journey steps. One example is letting people take a picture of a check and deposit it through the bank’s app rather than doing it in person. While automation of processes is highly technical, the focus is on enabling simple, useful, and increasingly engaging experiences.
  • Proactive personalization uses information about a customer—either based on past interactions or collected from external sources—to instantaneously customize the experience. Remembering customer preferences is a basic example of this capability, but it extends to personalizing and optimizing the next steps in a customer’s journey, such as immediately putting a valued traveler on an upgrade list.
  • Contextual interaction uses knowledge about where a customer is in a journey to deliver them to the next set of interactions, such as a retail site showing a customer the status of a recent order on the home page. Some hotels are experimenting with using their app to operate like a key when a customer gets to his or her room.
  • Journey innovation extends the interaction to new sources of value, such as new services, for both the customer and the brand. Companies mine their data and insights about a customer to figure out what adjacent service her or she might appreciate. The best companies design journeys that enable open-ended testing to allow for constant prototyping of new services or features. This may include, for example, an airline’s app that has the ability to integrate with a taxi service so that travelers can book cars to pick them up when they arrive at their destination.

Activating customer journeys to capture value requires journeys to be treated like products that need to be actively managed, measured, and nurtured. How well companies are able to do that will dictate how successful they are in making customer journeys a competitive advantage.

Read the full version of this article, “Competing on customer journeys,” on the Harvard Business Review website.

McK: The Three Cs of Customer Satisfaction: Consistency, consistency, consistency

Below is an article from McKinsey & Company Insights & Publications  March 2014 issue. This article about talks how important it is to provide consistency across the customer’s journey to ensure satisfaction. I have another blog post which talks about how to map a customer’s journey: Using Customer Journey Maps to Improve Customer Experience.

The Three Cs of customer satisfaction: Consistency, consistency, consistency

It may not seem sexy, but consistency is the secret ingredient to making customers happy. However, it’s difficult to get right and requires top-leadership attention.

March 2014 | by Alfonso Pulido, Dorian Stone, and John Strevel

“Sustaining an audience is hard,” Bruce Springsteen once said. “It demands a consistency of thought, of purpose, and of action over a long period of time.” He was talking about his route to music stardom, yet his words are just as applicable to the world of customer experience. Consistency may be one of the least inspirational topics for most managers. But it’s exceptionally powerful, especially at a time when retail channels are proliferating and consumer choice and empowerment are increasing.

Getting consistency right also requires the attention of top leadership. That’s because by using a variety of channels and triggering more and more interactions with companies as they seek to meet discrete needs, customers create clusters of interactions that make their individual interactions less important than their cumulative experience. This customer journey can span all elements of a company and include everything from buying a product to actually using it, having issues with a product that require resolution, or simply making the decision to use a service or product for the first time.

It’s not enough to make customers happy with each individual interaction. Our most recent customer-experience survey of some 27,000 American consumers across 14 different industries found that effective customer journeys are more important: measuring satisfaction on customer journeys is 30 percent more predictive of overall customer satisfaction than measuring happiness for each individual interaction. In addition, maximizing satisfaction with customer journeys has the potential not only to increase customer satisfaction by 20 percent but also to lift revenue by up to 15 percent while lowering the cost of serving customers by as much as 20 percent. Our research identified three keys to consistency:

1. Customer-journey consistency

It’s well understood that companies must continually work to provide customers with superior service, with each area of the business having clear policies, rules, and supporting mechanisms to ensure consistency during each interaction. However, few companies can deliver consistently across customer journeys, even in meeting basic needs.

Simple math illustrates why this is so important in a world of increasingly multichannel, multitouch customer journeys. Assume a customer interacts six times with a pay-TV company, starting when he or she undertakes online research into providers and ending when the first bill is received 30 days after service is installed. Assuming a 95 percent satisfaction rate for each individual interaction—whether measuring responsiveness, the accuracy of information, or other factors—even this level of performance means that up to one in four customers will have a poor experience during the on-boarding journey.

The fact is that consistency on the most common customer journeys is an important predictor of overall customer experience and loyalty. Banks, for example, saw an exceptionally strong correlation between consistency on key customer journeys and overall performance in customer experience. And when we sent an undercover-shopping team to visit 50 bank branches and contact 50 bank call centers, the analysis was confirmed: for lower-performing banks, the variability in experience was much higher among a typical bank’s branches than it was among different banks themselves. Large banks typically faced the greatest challenge.

2. Emotional consistency

One of the most illuminating results of our survey was that positive customer-experience emotions—encompassed in a feeling of trust—were the biggest drivers of satisfaction and loyalty in a majority of industries surveyed. We also found that consistency is particularly important to forge a relationship of trust with customers: for example, customers trusted banks that were in the top quartile of delivering consistent customer journeys 30 percent more than banks in the bottom quartile.

What is also striking is how valuable the consistency-driven emotional connection is for customer loyalty. For bank customers, “a brand I feel close to” and “a brand that I can trust” were the top drivers for bank differentiation on customer experience. In a world where research suggests that fewer than 30 percent of customers trust most major financial brands, ensuring consistency on customer journeys to build trust is important for long-term growth.

3. Communication consistency

A company’s brand is driven by more than the combination of promises made and promises kept. What’s also critical is ensuring customers recognize the delivery of those promises, which requires proactively shaping communications and key messages that consistently highlight delivery as well as themes. Southwest Airlines, for example, has built customer trust over a long period by consistently delivering on its promise as a no-frills, low-cost airline. Similarly, Progressive Insurance created an impression among customers that it offered lower rates than its competitors in the period from 1995 to 2005 and made sure to highlight when it delivered on that promise. Progressive also shaped how customers interpreted cost-reduction actions such as on-site resolution of auto claims by positioning and reinforcing these actions as part of a consistent brand promise that it was a responsive, technology-savvy company. In both cases, customer perceptions of the brands reinforced operational realities. Such brands generate a reservoir of goodwill and remain resilient on the basis of their consistency over time in fulfilling promises and their strong, ongoing marketing communications to reinforce those experiences.

Becoming a company that delivers customer-journey excellence requires many things to be done well. But we’ve found that there are three priorities. First, take a journey-based approach. For companies wanting to improve the customer experience as a means of increasing revenue and reducing costs, executing on customer journeys leads to the best outcomes. We found that a company’s performance on journeys is 35 percent more predictive of customer satisfaction and 32 percent more predictive of customer churn than performance on individual touchpoints. Since a customer journey often touches different parts of the organization, companies need to rewire themselves to create teams that are responsible for the end-to-end customer journey across functions. While we know there are an infinite number of journeys, there are generally three to five that matter most to the customer and the business—start your improvements there. To track progress, effectiveness, and predict opportunities, you may need to retool both metrics and analytics to report on journeys, not just touchpoint insights.

Second, fix areas where negative experiences are common. Because a single negative experience has four to five times greater relative impact than a positive one, companies should focus on reducing poor customer experiences, especially in those areas in which customers come into contact with the organization most often. For instance, training frontline service representatives to identify and address specific customer issues through role playing and script guidelines will go a long way toward engendering deeper customer trust.

Finally, do it now. Our research indicates that since 2009, customers are valuing an “average” experience less and have even less patience for variability in delivery. In addition, companies that experience inconsistency challenges often expend unnecessary resources without actually improving the customer journey. Making additional investments to improve the customer experience without tightening the consistency of experience is just throwing good money after bad.

For more details about customer satisfaction across industries, see “Customer satisfaction survey: Who’s up and who’s down,” on the McKinsey on Marketing & Sales website.

About the authors

Alfonso Pulido is an associate principal in McKinsey’s San Francisco office, where Dorian Stone is a principal; John Strevel is an associate principal in the Toronto office.