A company like me: Beyond customer-centric to customer-engaged
I'm going to start out by telling you a story about Ryanair.
In 2013 Ryanair, which had been known for its disdain for its own customers, underperformed, issuing two profit warnings. Needless to say, this scared their shareholders and they called for some action.
As a result, Ryanair instituted the "Always Getting Better Programme" in late 2013.
The whole idea was to be more "customer-centric" and do something that would benefit customers and thus, get them to start flying Ryanair again as they had in the past. So the company included what are for the most part, table stakes for airlines, but for Ryanair, with customers that had low service expectations to begin with, was almost shocking. Things like:
- More easily navigable website -- for example, to book a flight went from 17 to 5 clicks
- 24-hour grace period to make booking changes -- rather than charging for the changes as soon as the flight is booked.
- Cut in baggage fees
- Free second cabin bag
- Allocated seating
- Allowing the use of portable electronic devices
But, there's a kicker. The reason for it. This is Michael O' Leary, Ryanair CEO's comment when they got back on the right revenue track for 2014:
"If I'd only known being nice to customers was going to work so well, I'd have started many years ago."
Ugh. That is simply cold -- and indicative of something very important that I'll point out in a minute or two.
One more thing, before we really get going.
I'm going to show you something I read about a month ago. It was a blog post based on a press release I had gotten from CHAMPS Oncology, a cancer care organization business affiliate of The Center for Health Affairs, which handles operations for Northeast Ohio hospitals. The post was on the elements of great customer service. While it was a pretty straightforward post for the most part, one thing got my attention. It was this:
"Personal Connection
My colleagues and I feel the importance of our clients' work every day. We genuinely respect and appreciate the service our facilities are providing for cancer patients and their families. It's personal for us as we all have a relationship with someone who has been touched by cancer. That's part of what drives our team to provide excellent customer service -- we know our work is all part of the greater effort to fight this horrible disease."
This was the most emotionally strong part of the entire post. The rest was good enough but pretty much a blog post on customer service. But because the entire staff had relationships with people who had been touched by cancer, there was a crystal clear singular voice in that paragraph, that transformed the blog post. Because of that one paragraph, I trusted the whole post. The power of empathy to engender trust is powerful, indeed.
What am I getting at?
In the midst of writing The Commonwealth of Self-Interest, I had a bit of a breakthrough. For the longest time, I (and everyone else) have been hearing that we need to be a customer-centric culture. But, I realized when I heard the Ryanair story, that being customer-centric was possible tactically without any real concern for the customer.
You could do things that would benefit the customer but you only did them to make sure that your company was doing what it had to do to benefit its shareholders -- meaning focusing on engaging your customers -- and true value exchange with them wasn't part of your DNA, but a tactical, pragmatic and reactive move to ensure business value. You give up something to get something, rather than think through the idea of value exchange and embed it into the culture of the company.
To build the kind of company that can demonstrate successful customer engagement requires a culture that would foster a relationship between the company and its customers characterized by this value exchange. That's what customers are looking for anyway. You're a customer. You know that you require a relationship that makes you comfortable with the company -- at its optimum, if you care enough, you'd feel that the company was trustworthy and "understood" something about you.
The company doesn't exaggerate, doesn't don't lie, doesn't hide things. They are believably honest. The company knows enough about you to want to provide you with what you need as a customer to derive value from the company and are willing to provide it. At every level of the company -- from its human representatives to the way it does business to the automated processes -- this value exchange is reflected. No person, no process is not impacted by or impacts the customer in a "company like me."
Establishing Who and How
How do you go about reaching this nirvana, this exalted state of a "company like me?" First understand who the customer and your employees trust. Also, how they trust.
Back in 2000, Edelman, one of the world's leading agencies, released the first Edelman Trust Barometer. The report was created to become the go to for becoming the annual report of record for who and how people trusted. The broad framework was simple -- ask people who were their most trusted sources. In the seventeen years, it has existed it has become the most trusted source for who is your most trusted source.
In one of the earlier incarnations, 2004, a new category of trusted humans emerged -- 23 percent said a "person like me" was one of their foremost trusted sources.
Who exactly is a person like me? Let me reassure you, there is no one exactly like you (or me) on this planet. But that said, a person like me is someone who you feel has similar interests to you -- perhaps similar or identical hobbies, or sports teams, or business interests or language or food and beverages.
You're Apple fan...people, perhaps? I would imagine if I asked you about a brand that you love, you could give me one -- and go on and on and on... and on and on... about it. I would bet that you've even at times participated in a brand love fest with strangers.
But those strangers? That's a "person like me." In 2004, 23 percent saw them as a most trusted source. By 2006 that categorical person like me was considered a credible public spokesperson, which means for the first time, we were seeing the rise of influencers -- especially brand influencers.
By 2016, the number of people who felt that a person like me was a trusted source was 82 percent and by 2017, that same peer was identified as a very or extremely credible spokesperson by 60 percent, tied for first place with academic or technical experts. That means that peer trust has become perhaps a powerful source of faith, a place to put that trust.
More on a company like me, then? Sure.
What does that mean for a company? It means that the customer, to be engaged in a way that is meaningful with the company, must trust the company to the point that they feel the company consists of peers of that customer and those peers are found in all areas of the company that touch that customer -- sales, marketing, and customer service, in particular. Most importantly, and I'm calling this out: the company must show itself to be trustworthy, empathetic, believable and respectful.
These four characteristics drive, not a customer-centric company, but a customer-engaged company. None of these attitudes and behaviors is easy to measure because they are often intangible in any way beyond a feeling, but your business can make concrete efforts and establish concrete programs and deliver a supportive culture to make this work the way it should.
Let's briefly look at the four characteristics -- trustworthiness, empathy, believability, and respect -- and then look at how to build the culture that makes gives the employees and the customers the kind of support that leads to not just a customer-centric organization, but a customer-engaged one.
A Company Like Me: Trustworthy
The communications revolution, which because I've talked about it a million times, I'm not describing again, led to a change in who and how we trust. If you believe, as I hope you see I obviously do, that the most important thing that your company can do for its customer is to establish a trusted relationship, then this is a momentous change. Being capable of building that trust with the customer should be an integral part of your business culture.
What exactly do we mean by trust in a business or a brand?
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Does it mean that trust is based on successful and frictionless transactions? Where the customer trusts that when they buy from you they will get the products or services they paid for, the quality of products or services they expect, the transaction itself is protected from theft and frictionless in the interchange? Think the Amazon return process.
Does it mean trust in the interactions between company and customer? Where promises made are kept? This isn't necessarily someone telling a customer "I promise that I will..." It's FedEx and UPS delivering packages averaging a 99 percent on time success rate. It is NOT GE Appliances saying that you will have the parts you need in three to five days -- and failing to deliver any parts at all ever -- twice. Sigh.
Does it mean trust in the truth of what is said? Where the company is being honest with the customer about whatever the subject matter, good or bad? The United CEO's mea culpa 24 hours after his first response to the removal of their passenger from the plane was 24 hours too late. Honesty is the best policy goes the old saying. It's an old saying because it remains true. Truth in business means trust in business. Let's make that an old saying.
Does it mean the company is acting as a trusted adviser to the customer? Where either the customer is showing that they have a product-agnostic way of thinking about their customer and are willing to help them think through their strategies, practices, approaches, without the primary focus being the products or services the company sells.
For example, Salesforce has a program called Ignite that consists of staff members whose only job is to work with Salesforce customers to innovate with and for the customer's company. Oracle has a program that operates at the same level but with a more operational approach. Both are designed so that the company plays the role of trusted adviser to the customer.
There is another facet to this. Your business needs to be able to trust its employees in how they deal with customers. That means that there needs to be formal organizational support for the empowerment of those employees. The Philadelphia Flyers who empowered each employee to work with customers to resolve issues and answer questions no matter what it took to do so. But also, if you remember, the employees were rewarded for outstanding performance when it came to the results of their efforts with the fans at the arena and elsewhere.
This is a hint of what it takes to start putting the building blocks of an exceptional culture in place. Build trust with the customers, trust the employees by empowering them to deal with the customers in the name of the company and then make sure that the employees are rewarded for successfully adding to the building blocks of that trust with the customers by compensating the employees and thus supporting their efforts with concrete reward. Institutionalization of trust is a core principle of a customer-engaged culture.
But, of course, this isn't enough.
A Company Like Me: Empathetic
Empathy is not just a personal matter. It is a business and most importantly, cultural matter.
Before we get into what an empathetic corporate culture means, let's look at some numbers from The Empathy Business (yes, that's real), a UK-based organization who are focused on measuring "actionable empathy" at businesses. Their definition of empathy in business is more than suitable:
"We define corporate empathy, not compassion or sympathy, as the emotional impact a company has on its people -- staff and customers -- and society -- the next generation."
What makes The Empathy Business interesting but not necessary on the right track is that it measures empathy -- takes something that has often been mistaken as "feel the customer's pain" and left at that and fleshes out what makes a company empathetic. The things that they investigate and score are, by category:
- Ethics
- Leadership
- Existing culture
- Brand perception
- Public messaging on social media
- Employee perceptions of the company
- Diversity and inclusion initiatives
- Environmental concerns and sustainability efforts
The Empathy Index has its detractors, those who feel that you can't quantitatively measure empathy and others who question the methodology. I think the criteria seem incomplete. Where is corporate philanthropy for example, which would be a primary measure of empathy I would think?
Regardless, what they have found is that the top ten scorers on their Empathy Index, which measures how empathetic they find companies to be, increased their market capitalizations more than twice as much as the bottom ten and generated 50 percent more earnings per employee from 2015 to 2016.
That unto itself isn't all that interesting because that could be that you are talking about overall, better run companies doing far better than poorly run companies. But well run companies include empathy as part of their game plan.
But, you say, isn't it appalling that you are looking for business value from empathy? That's so personal...
Yes it is personal, but it also can be embedded into the genetic code of a company -- and I'm arguing here, has to be.
Sandra de Zoysa, Chief customer officer of the wildly successful Sri Lankan telco, Dialog Axiata, said this to me a few years ago,
"This has more to do with bonding and relationships for the long term. It's not just a phone. It's not just revenue to us. Wherever you go, there is Dialog in your life making it easy for you. It's all about how well Dialog fits into Sri Lankans' lifestyles. This is service from the heart."
This is business empathy at its best -- deep knowledge of what customers' wants, desires, pains, and needs are and then building the organizational culture to support that -- with the overarching reminder that this is a business and the purpose of it is to sell things.
But in the case of Dialog Axiata, it is selling services that are meaningful to its customers and spending the time to get to know them in ways that others don't -- and the company attitude is one that says, "we may be a business, but we are Sri Lankans who make up this business and we want to be a part of your life -- if you will let us."
Contrast this to Ryanair -- and you see the difference between a cold-hearted company doing what it has to to ensure shareholder value and a company that truly believes in the value exchange that engagement with customers bring.
An empathetic company needs to be made up of empathetic people from the top down.
So, what do you do to make your business truly empathetic on its way to a customer engaged company?
Listen to the customers -- and the detractors. Customers who are buying from you often have something to say about you. Those who really don't like you, have a reason that they really don't like you. Find out what the customers are thinking and hear it. Even if it is painful. Many years ago, one of my retail clients was forming a customer advisory board and the first person they reached out to recruit was one of their most active detractors. She became the first advisory board member and within a short while, a firm advocate for the company. Because they paid attention.
Ethics, diversity, sustainability, and corporate philanthropy are all active C-level and board responsibilities. Salesforce has a Corporate Equality Officer, Tony Prophet, whose entire job is to see that ethics, diversity, and sustainability are all part of the corporate portfolio and the corporate culture, regardless of their direct relationship to sales. Salesforce handles corporate philanthropy via their Salesforce Foundation, which had given out somewhere around $600,000,000 in grants by the end of 2016.
It starts from the top. The CEO on down must be able to reflect and transmit that empathy as do his officers and the staff. This should not only be publicly obvious but reflected in the actions of the company's leading individuals. In 2015, my wife and I had to cancel a cruise on Oceania Cruises that we were about to embark on from Rio de Janeiro due to a death in the family. We had insurance so we were covered on getting the money returned on this rather expensive vacation.
In all our interactions with the company, not only did we barely hear, "sorry for your loss" which would have been tolerable, but there was an enormous and disturbing emphasis on "we don't owe you any money because your cancellation was last minute" -- despite the fact we weren't even asking for anything.
This was compounded by a direct mail letter in response to my wife writing to the president of the company from their customer experience director (I'm not kidding) who said pretty much in sum, "Sorry for your loss, but we want to make it clear we are not liable." That is close to a literal statement.
We have never taken that cruise line again, and after several emails and letters asking them to stop sending their sales literature -- which they have completely ignored -- now just rip them up and recycle them. All because of the lack of empathy. Or, in this case, even sympathy.
Transparency and accountability as policy not buzzwords. Customers want to know who you are as a company and how you conduct your business. If you are an empathetic company, you want to let them know, good or bad. Sandvik AB, the European mining and construction tools and machinery manufacturer has a publicly available Code of Conduct that is the foundation of its operations and governance. It is a combination of pledges and procedures -- one that makes them publicly accountable.
In combination with that, they include themselves in the Financial Times Stock Exchange FTSE4Good index which is listed as a sustainability index but really is a vehicle to commit oneself to being accountable for environment, governance, and corporate social good. The results are a profitable, $10.5 billion company that is trusted worldwide.
But it keeps going.
A Company Like Me: Believable, Personable
I prefer believable to authentic though this is as close to the idea of authenticity as you are going to get. The idea is not that you believe what the company says, but that you believe that the company has real people with warmth and personality who the company fosters and supports. and thus, this is a good company. It is believable to you as a customer because you can see elements of yourself as a "regular person" in the leadership or staff of the company in question.
This means the willingness to expose the not just the human side of the company in whatever medium it is in at any given time, but the real people who make up the company get to speak in their own voice. For example, using Twitter or Facebook judiciously to allow empowered and/or assigned employees to communicate in their real voices is far more powerful than pushing a sales or marketing message via those same social media.
But it means exposure via more than social media. The Golden State Warriors, the marquee team of the National Basketball Association, are also the world's most popular and recognized basketball team. One of the reasons for that is not just their winning ways but their willingness to allow their stars such as Steph Curry to show their human side. Just check out his little daughter Riley Curry's videos. You'll see what I mean.
Finally, a Company Like Me: Respectful
Finally, to become a customer-engaged company, you should show that you are respectful of the customers you have, the companies you compete with in the markets you are in, the employees you hired, and the world in general.
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One of the most important signs of respect for your customer is the respect for a customers' information privacy.
With all that, a policy that respects the customer's choices of privacy is the best way to start.
Ultimately, if you are talking about building a culture that fosters engagement with a customer, the company should respect the notion of customer choice. The customer has provided you with information. If freely acquired, that information is there for some potential use.
It could be used for learning more about the preferences of the customer, a relatively benign purpose. It could be use, as Facebook and Google do to provide personalized ads -- a little less benign. It could be for running the kind of analytics that suggest what the best next action is to take with the individual customer -- even less benign. But whatever it is, the customer needs to willingly provide it and let you use it for agreed upon purposes.
A significant number of companies either bury the use in terms and conditions that most customers sign when they use a website for something or get something in return for providing the information.
The more diabolical approach is to support opting out -- meaning a policy that says, we are going to use it unless you tell us not to -- which is disingenuous at best. Even though opt-in -- the customer gives the company permission to use the information -- is less advantageous to the company, it reflects respect for the customer.
Think of it this way. How many of you have had auto-renewal of something that you ordered for a year, didn't really pay attention enough to the terms of service to know that it was turned on unless you turned it off, and found out too late when you were irrevocably charged for something you no longer had an interest in. Raise your hand.
That's opt-out. Opt-in means the customer has control over how they want to continue to interact and as we see, sometimes transact, with you. When the company policy supports opt-in, it is a sign of respect for the customer and their needs -- even though disadvantageous in an immediate sense for the company in question.
To elaborate on this, I'm simply going to show you two things -- Facebook's terms of service in 2009 and now. Keep in mind that the way you "pay" Facebook is letting it use your data for things in exchange for your free use of the site. Make no mistake about it, its a business, not a friendly neighborhood there for your use with no terms and conditions.
This was 2009 terms of service:
"[we take an] ...irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute...."
This was a total shock, because Facebook decided that it could use your data for its own purposes whether you retained your membership with them or not. There was no mutual value exchange, no basis for trust. This wasn't a violation of privacy, but it was a lack of respect for the member's value to Facebook. Needless to say the outcry was enormous -- and justified.
To the credit of Facebook, they have spent the last eight years fixing most of their problems. They have shown the ultimate respect for their members/customers by correcting the problems in unequivocal terms. Here are the 2017 terms of service:
"You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings. In addition:
For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it."
In 2016, Facebook was #1 in the world on the Empathy Index I spoke of above. Lessons learned.
For the next several years, I'm going on a crusade to fight for the idea of a customer engaged culture, rather than a customer-centric company. I think that customer-centrism, which certainly has its benefits, still doesn't go deep enough into the core of a company's being and thus for me, the stamp of approval is a customer-engaged company that shows signs of at least those four characteristics -- empathy, trust, believability, and respect.
Once I finish The Commonwealth of Self-Interest, which needless to say is actually an entire book on this subject, I'm going to fight to see that the business world recognizes customer engagement for what it is -- a means to build a truly two-way relationship, valued by all involved.
Who's with me?