Video: Building customer loyalty is all about data
Knowing customer behavior is key to either anticipating how they are going to interact or understanding how they interacted and why in particular that way. The customer's history with the company and their feelings about the company have a significant impact on the results.
Hey everyone. I apologize for taking so long to start writing in a serious way again, but rest assured for the rest of the year and into the coming years, if ZDNet will continue to have me, I'll be writing more frequently.
To celebrate that (Whoo! Boo-yah!) I'm going to write something today on something that has been vexing me for a while, and that I figured out in the last several months. What is the difference between customer engagement, customer experience, consumable experience, and now, a new one, brand experience -- more related to the consumable experience than the overall customer experience? If that doesn't bother or interest you, ta ta. If it does, hang on for the ride.
Thinking about it from on high...
There is poetry and expressive clarity in the natural use of language when used well. That means that the constructs of the phrasing, the articulation of the idea, the context that the paragraphs reside in, are all something apparent to the reader as they read, either explicitly or implicitly. But, often, especially in our era of highly visible social presence, we spend a lot of time dissecting how someone says something, and lose what they are saying and why they are saying it to accidental obfuscation.
If I think about it as a rational human being, I realize that it is my responsibility as the writer to make sure that I choose or create my definitions well, that I convey the context with clarity and that I make sure that what I am trying to express is expressed in the metaphors and thus the phrasing of the audience members who are "hearing" me. The atmosphere I create, the environment I engineer, the wordsmithing I do, combined, create a portrait that I can present that, if done truly well, make that portrait viewer, the art goer, shiver with the knowledge that they "get it."
That's the writer fashioning the "reader experience." But it is also the way that a true practitioner creates the customer experience. It is crafted as art and engineered as science but that is, instead of an onus, a positive approach to the creation of the conditions that ultimately lead to a fully engaged customer, not an exercise in mind and emotional control.
But the problem that keeps showing its ugly mug is that the definitions around customer experience and to some extent customer engagement are fast and loose -- and pretty much, not what the practitioner is looking for, but instead, are built around what the vendor wants to sell -- muddying the waters to a degree that makes it confusing.
So, in the interests of the commonwealth (of self-interest, of course), I'm going to clarify the definition of customer experience and customer engagement and then talk to the idea of the three kinds of customer experience that can be addressed legitimately and how to craft your story around them in the best possible way -- at least the way that I see it.
Since customer engagement is NOT really the center of this story (though it is the back story in the case of all customer experience -- it always is), I'll get that out of the way quickly.
The definition of customer engagement
I have a clear definition: The ongoing interactions between company and customer, offered by the company, chosen by the customer.
Here's what I mean by that:
1. A company is born with constraints -- labor, time, financial, regulatory, you name it. That means that no matter what they'd like to do, it's likely that one way or the other there are either roadblocks to getting there or restrictions on their ability to do it.
2. A customer doesn't care about the constraints the company has -- they only want to satisfy their self-interest. Self-interest isn't a bad thing. It's what a person wants to do that keeps them happy as they trek on the path to happiness. The more control a person has over that journey to happiness, the happier they are. The control manifests itself for an individual as control over the choices they can make concerning the direction of that journey.
3. A customer also doesn't care about the journeys of the other customers of that company. When it comes to their relationship to the company -- the customer wants to see that the company values them as an individual. The constraints and the other customers are moot as far as they are concerned when it comes to their relationship to the company -- except on occasion.
4. Thus, the company's responsibility is that despite the constraints and despite the desires of the other customers, that they concern themselves with the ways to provide individual customers with a semblance of control by giving them a basket of products, services, tools and consumable experiences (more on this later) that they can choose from -- and thus showing that customer they are valued.
5. Doing that keeps the customer happy enough (not ecstatic or continually delighted) to want to continue to interact with the company (and transact, a.k.a buy stuff).
There is much more to this but I've written about it before so for the purposes of this post, it will have to remain the back story. Suffice to say, it will suffice (to say).
Customer Experience then...
Customer experience is not the same as customer engagement. It is symbiotic. The overarching definition of customer experience -- the one that you most likely mean or are looking for:
Customer experience is how a customer feels about a company over time.
That is a complex feeling too. That is driven by the sum total of the interactions and the results of those interactions and the expectations you had of those interactions and the impact of prior interactions and their results on the present interactions and their results. It is driven by the day that you had overall and the impact that the day had on your interactions with the company, whether the results of that day are endemic to the company or not.
But what it isn't, is enabled by technology or engineered per se by the company. It is how a customer feels and technology cannot, I repeat, IT...CANNOT...ENABLE...FEELINGS. Sorry to yell, but I'm an emotional guy. And...I'm actually not yelling, I'm just capitalizing letters. The sound pollution wasn't increased a decibel. See how the minds works?
So how is it different from engagement? What makes it symbiotic?
Customer experience: The difference from engagement
I have to presume that you can see by their definition that they aren't conflicting, but nor are they interchangeable. They are however, symbiotic.
Expanding on that thought a little, let's make a something of a blanket statement:
Successful engagement with a customer over time can lead to a potentially great or at least good enough customer experience. And if the customer experience is positive, the engagements are likely to be more positive than they otherwise would have been -- and the customers more forgiving of negative interactions than they otherwise would have been.
The success of this singular engagement over time or its failure is what leads to what most consider "the" customer experience.
To take it a tiny bit further, while the feeling that is translated to a great, good or not so good customer experience can change, the fact that this occurs over time is of paramount importance. Understanding its ongoing nature is knowing what it is. Also top of the charts here, is to realize that "feels" is a scientific word, not a literary term per se. That means the customer's behavior is driven by his or her perception of something that makes them emotional in a positive or negative way - they feel good or bad about the ongoing experience.
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Engagement however is a different animal. While time is critical -- it's the ongoing interactions that make it engagement, engagement is the communications between or among the companies and their customers. The particular interaction or set of interactions is what determines successful or failed engagement. How engaged a customer is with a company is often determined by how they are feeling at a specific moment in time about a company -- and its impact on the actual interaction(s) undertaken.
A customer engagement "event" occurs at the point of the interaction and immediately before and after it. How fully engaged the customer is at that time, is based on the success or failure of those immediate interactions. Emotion plays a huge role in that success or failure -- meaning the customer's current feeling about the company and about whatever is driving the interaction.
The interplay of engagement and experience drives the customer's experience, based on their history and the different weights assigned to different results that had different expectations of the events as they occurred.
The benefit to a business is that this gives the organization the means to identify the customer's behavior, the context for it, and a picture of the emotional content because it is recorded in some fashion. Sometimes it's a conversation that indicates something. Sometimes it's a pattern of activity. But, all in all, it is likely a recorded action or set of them.
Thus, knowing customer behavior is key to either anticipating how they are going to interact or understanding how they interacted and why in particular that way. The customer's history with the company and their feelings about the company have a significant impact on the results.
How then to think about the customer experience when mapping a strategy for engagement? Well, each year, Bruce Temkin, the #1 guy when it comes to customer experience, gets roughly 10,000 actual customers to rate their experience with individual brands in multiple industries. His resulting rankings are based on three things, all of which can be considered planning guidelines for your company's engagement strategy. They are:
- The success customers had with recent interactions with the company. Did the customers accomplish what they set out to accomplish?
- The ease of their recent interactions with the company.
- Based on those recent interactions with the company, how did the customers feel about the company?
Note something here. If you read the lines, you see that the engagement (the interactions) and the experience are totally intertwined -- in a Platonic way of course. If you read between the lines, you see it isn't the actual experience the customer has with the company, but their perception of the experience.
While I'd love to be altruistic and say that what companies provide is what customers really and truly get -- it's more what customers think they are getting and how they feel about it that matters -- though it may be exactly what they are getting. But one way or the other they have to feel that what they get is important -- to them.
Before you make me into a demon who is devaluing authenticity and transparency, I'm going to respond.
As important as needing to be authentic and transparent is to a relationship with a customer -- and it is -- one other thing that governs the relationship of the company and customer is the willingness of the customer to engage or disengage framed by their long-term experience -- their feeling about the company.
For example, if you look at Bruce Temkin's 2016 Experience Ratings, you see that Comcast is one of the bottom feeders -- as they are every year, it seems. Out of 294 total companies that were rated (each with at least 100 respondents from the survey), Comcast as a TV Service was 289th and as an Internet Service Provider (ISP) ranked 284th. What makes these pathetic numbers even more sad, is that this is an improvement over 2015! Sigh.
The anecdotal evidence to support their ranking is overwhelming. For example, in early 2015, a story hit the news that a Comcast customer claimed that she got a heart attack due to an anxiety-producing, stress-inducing customer service interaction with Comcast. It went viral, even though there was nothing but the customer's claims because Comcast customers experiences were so bad that the story seemed credible, and their reputation so poor that even non-customers believed it.
What makes this particularly "poignant" is that I was a Comcast customer for 16 years. I used their internet services only but used them for such a long time that I was even a beta customer in my area. I hated almost every interaction I had with them because, with few exceptions, they were either overwhelmingly negative or minimally head scratching.
But notice I said I was a customer for 16 years -- making me apparently guilty of self-flagellation. Why did I stay?
To put it in very simple terms:
1. The technology was good enough to meet my needs for the internet and their competitors at the time weren't compelling enough in their offers to make me think they were much better.
2. I didn't have a high degree of interactions with them -- a few a year at the max and because the tech worked I lived with it.
3. The cost of switching -- which isn't a dollar cost but a physical and behavioral cost was high - particularly in that I would have to change my email from comcast.net to something else and that was 16 years with that email
4. That all led to inertia -- I didn't switch because it was too much work and nothing was compelling enough to make me switch -- neither a competing offer nor a triggering bad event --
-- Until there was the bad event.
Keep in mind, as far as Comcast knew, given that our bills were paid on time and they never actually took my customer pulse, they assumed -- wrongly -- that I was a loyal customer. Timely payments for premium internet over 16 years can lead one to think that.
But then the bad event.
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I got an offer via email one day from Comcast that seemed too good to pass up to improve my internet speed/bandwidth at a reasonable price. I responded to it via email and then began to fill out digital "paperwork" to activate the offer. Weirdly, I could fill things out to a point but had inexplicable (and annoying) trouble getting to the final stages to seal the deal. Initially, I thought it was a glitch in the online forms.
Ultimately, I called a customer service representative re: the offer and they told me that it was for new customers only. There had been NO indication of that anywhere in the offer I received. None. When I queried, rather irritated, as to why I got the offer then, no good answer was forthcoming. I let it go...again... but was unhappy, wondering why a customer of 16 years was not only not afforded the courtesy of an offer like this, but why they knew so little about me that I even received it.
Three days later, I...got...the...exact...same...offer...again. Again.
I terminated Comcast that day.
This story is a perfect example of the symbiosis of engagement and experience. Comcast didn't ask me why I was leaving or even show that they cared enough to lure me back.
But here are the facts:
- Sixteen years of bad service interactions (continuously bad engagement leads to overall bad experience)
- Reputation of Comcast as a horrible customer service company which was reinforced by my personal experience with the company. (bad experience reinforced by stories of bad engagement)
- Their absolute lack of knowledge of me as an individual customer -- and their apparent lack of interest in getting to know me. (bad engagement practices) Which led to:
- My perception that they didn't care about their most loyal customers. (reinforce bad experience) All in all, this led to:
- An event trigger that took all four of the above and exacerbated the total effect -- leading to enough of a jolt to move me from my inertia to cancellation. (moment of bad engagement added to overall bad experience tied to high density of bad engagements = cancellation)
It was a moment of engagement (the second identical offer) that triggered the disengagement with Comcast, but it was my overall experience with Comcast that framed the departure. If I had a great history with them, I would have chalked it up as a problem to be solved though I was otherwise happy. Good experience = I stay with Comcast and let the problem go as a glitch; but horrible overall experience = bye, bye Comcast.
To think about a customer's experience requires thinking about the context and the framework of the customer's relationship to the company -- not just the sum of the interactions -- because each interaction at a given moment in time is impacted by how the customer feels at that moment in time about the company as a whole -- which effects the outcome that the interaction produces.
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That means not only having the knowledge of individual customer's transactions, but their interactions with the company, their conversations about the brand. It means that as you amalgamate and analyze all that information to gain some individual insight, you also find the elements common to many of them that you need to define the programs that make the customers involvement over their time with you minimally friction-less and possibly even enjoyable.
All this while satisfying the purpose they engaged with you in the first place -- whatever the reasons from the more utilitarian -- convenience, price, availability of products, services, and, as I will show you in shortly, experiences to the more emotional -- love of the brand, status.
What you offer to them, in combination with the results derived from the interactions with you, will drive their feelings toward your company.
But this isn't the same as consumable experiences. Not an iota.
Building consumable experiences
Back in 1999, Joe Pine II ( a huge Yankees fan BTW) and his co-author James Gilmore, wrote a seminal book called "The Experience Economy" which was updated in 2011. In this pioneering book, Joe took what had been archly defined as "mass customization" to a new level by speaking about the creation and "staging" of "experiences" -- which are created, designed, implemented, and monetized for consumption.
In Joe's bright eyes, goods, services, and staged experiences are what creates that overall great experience. In mine, for businesses to succeed in the 21st century, they need to provide products, services, consumable experiences and tools, to succeed or minimally, to differentiate themselves from the pack. But I'm not going to argue the point here -- or at all for that matter. More for later and also its all in the upcoming book. But I will say my name for what Joe is calling "staged experiences" is "consumable experiences."
She's an American Girl
Mattel's American Girl division has been more successful over its life than even Barbie when it comes to attracting contemporary audiences. For those of you not acquainted with them, the American Girl doll is a doll with a theme. It can be historical, like Felicity who lived in 1774 and is a horse lover and patriot spy or contemporary like Tenney, "who writes songs and plays guitar." Associated with each of the dolls is a storyline and dozens of accessories ranging from furniture to clothes to a book about the doll. The base doll costs from around $60.00 U.S. to $115.00, but the accessories associated with the story go for even more (up to $275.00 for a doll-sized diner, for example).
But the consumable experience is much bigger than the storyline around the doll. There are a series of premium monetized "experiences" at the retail stores that sell American Girl, which are all over the country at malls more often than not. When you enter the story with your child and their doll:
1. You can accessorize the doll -- e.g. buy the diner and the bed and the clothes that go with the particular doll -- all while you learn even more about the doll's story.
2. Your child and their doll can eat lunch together.
3. They can get their hair cut together.
4. They can go to the theater and watch a play about a doll, possibly even theirs.
You, the parent, come out about $400 lighter.
The funny thing is that you've spent $400 on an inanimate object eating, watching theater and getting a haircut, and with no gratitude from that doll. But... what you do get is a brilliant, ginormous smile from your child. Thus, even though you just spent that $400, you'd do it again wouldn't you? C'mon. You KNOW you would.
This is what I mean by a consumable experience. On the one hand you are paying for the actual extension of the story, not the thing itself. You are paying for what is going on in the mind and heart of your child -- and it is something that has been created and engineered and produced to evoke that feeling in your child. Plus the design itself is modular. It is reproducible easily and it is based on designs to evoke specific human behaviors in specific groups around specific ideas -- and can be done over and over again with lower cost as it scales.
American Girl retail store "experiences" are interesting because the "target child" is physically dragging the personal data into the store by bringing their doll in with them. The data the store employee needs is right there. A smart store employee has the cues for conversation -- and upsell and cross-sell showing literally right in the hands of the child.
Recapping for a moment: Are we clear on the differences between customer engagement, customer experience and consumable experiences now? Because if not, I can't do a thing about it because its impossible for me to hear you say so and thus I'm going to continue anyway.
There is one more kind of specific customer experience that needs to be defined and addressed and that would be the brand experience. Then I'll go away.
The nature of the brand (and branded) experience
The brand experience is similar to a consumable experience in that it is created and engineered and produced to evoke something. It is different in purpose. Rather than sell a monetized specific experience, it is designed for framing what the brand is to the customer, whether he is in the store or at home or at another institution. That's a bit of a dilemma, because the monetary reward isn't necessarily as immediate, but the long-term results both from perception AND financial are mission critical. How do you do this in a way that has the impact that you are shooting for at scale. What is the thinking that's behind this?
Once again a story: Teeling Irish Whiskey Distillery
Irish Whiskey is the fastest growing spirits category in the world. While it was invisible about 10 years ago -- and had been declining for decades -- it's now, according to the International Wine and Spirits Research data, growing at the rate of 11.2 percent per year, with 200 bottles being sold every minute and more than 104 million bottles exported in 2016. It's also really yummy. And in the interests of full disclosure, it is my personal favorite spirit.
This growth has sparked a major interest in the distilleries and along with the charm of Ireland itself, has driven a booming tourist trade around distillery visits in Ireland itself -- with nearly 2 million tourists hitting the varying distilleries (the biggest one being Midleton, home of Jameson's Redbreast and other significant brands that traverse the price and taste spectrum from end to end.
As a result of this boom, dozens of new Irish whiskey brands have been appearing over the past several years, vying for a piece of this fast-growing market. Of all of them, the most distinctive and the most successful has been Teeling Whiskey, the crown jewel of the long time Irish whiskey iconic family, who else, the Teelings -- Jack and Stephen. As Jack and Stephen took a long family history in Irish Whiskey forward, they had the good sense to hire Alex Chasko, an American from Portland Oregon, who has been the creative force behind the company as its master distiller. Truth -- great move.
The results at Teeling speak for themselves, with the establishment of a global brand that's worked its way into the hearts, minds and wallets and established itself as a category leader in a very short time.
I met Alex in 2014 in Dublin at a private whiskey tasting he conducted with me and four friends set up by my client, Thunderhead, arranged by the Fitzwilliam Hotel. Let's just say that we shut the bar down around 3am. Alex and I stayed in touch via LinkedIn and Facebook and, since I had become a huge Teeling fan due to the tasting in 2014, I got some data on the Teeling Distillery.
What caught my eye and is why they are in the book, in fact, is that in their first year of operation, 2016, as the first new distillery in Dublin in 125 years, 150,000 people passed through their portals to see this new upstart competing with the likes of Jameson and Bushmills. So, vacationing in Ireland this past summer, I paid a visit to the distillery to find out about the experience -- and, here's what I found -- in addition to the fact that there were two more Teeling expressions I loved.
The Teeling Distillery experience is a brand experience. It is designed to make sure that when you think of Teeling, you think of, not as Jameson presents in their version of the experience, a venerated brand, but instead a contemporary brand of Irish whiskey that is discovering new vistas and breaking new ground and is thus exciting to be around.
When you walk into the modest building on Newcastle, you see to your right a small café where you can enjoy a sandwich -- or a salad and sit around and chat. The front desk there advertises three types of tour -- which really means three levels of whiskey tasting, which range from 15 euros to 30 euros and the more you pay, the higher up the whiskey line you get. The basic tour gets you the trinity of their most widely distributed whiskeys -- the Small Batch, the Single Malt and the Single Grain.
But it is the distillery that truly creates the experience and paints the brand with the brush it wants to be painted with. What starts to distinguish the tour here from other distilleries is the Exhibition Hall which you are led into to start the tour -- and to start it deliberately without a tour guide -- so you have time to look around and absorb the history of the whiskey trade in Ireland and Dublin which is presented in a fun way with bottles and stock certificates and photos that involve both current and long dead distilleries.
This is important -- and no guide is important. Why? Because your experience with the history -- which is about 10 minutes before a guide shows up to start the guided tour -- is meant to be self-learned. That way, in effect, history is out of the way. Hold that thought. I'll explain it in just a second. Then you are led into a room where there is a short video that Jack and Stephen Teeling do for perhaps three minutes welcoming you to the distillery. Then comes the real deal -- the tour of the distillery. Before I get to it, though, I want to explain why the preliminaries are done this way.
Teeling's brand image is meant to be progressive. As Alex Chasko, the aforementioned master distiller, put it, a "we are a new generation of whiskey making. We start with the next chapter in Irish whiskey." So, the history of Irish whiskey making and the welcome video are not dwelled on. You find your own version of the history by wandering the exhibition hall in whatever way you want for 10 or so minutes, and then the welcome video you see on the way in is short, around three minutes, because they want to get you to the meat or maybe, mead of the matter, how they make whiskey.
When you actually see the distillery, there are several things that strike you besides three incredibly large (15,000, 10,000, and 10,000 gallon) copper pot stills. The distillery is spotless AND there are a helluva lot of viewing windows in the various pieces of equipment.
Remember, we are dealing with an experience created to produce a specific feeling around a brand image. For Teeling, that means a new generation distillery that is focused on producing contemporary and "generally personalized" expressions of whiskey that are targeted for specific groups and specific markets.
Thus, the primary focus of the experience is the distilling process. What makes this a truly interesting story is that Teeling actually thought of something that I never would have figured on. When they built the distillery, they built it with the idea that tourists would be going through it in large numbers.
So, for example, the distillery equipment has clear glass and windows into some of the equipment, the floors are spotless, the guides are multi-lingual and the tours are designed to have about 10-15 people come through at any given time in any given tour with a guide so that the flow remains steady and non-intrusive.
The actual pot stills for example, though they handle between 10,000 and 15,000 gallons, are also built for their aesthetics. The distillery, the backbone of their actual work, is designed not only to optimize the creation of the whiskey, but to provide a unique experience for various groups of people.
The distillery and the tour are crafted to also provide a sensory experience. In the course of the tour, you will see and hear the distillery and smell and taste the whiskey -- a sensory experience related explicitly to Teeling's offerings and their workplace and no other. It is very unlike the Jameson Experience for example, which is far more focused on the history of the distillery and its current brands and highly compartmentalized into segments like history, how to drink whiskey etc. in equal measure.
Teeling is a distillery built from the customer's point of view. But what makes this even more compelling is that this is the way that the whiskey is made. "We're making whiskey we like to drink," says Chasko, and, "because we know our audiences and what they are likely to like, we are right more often than wrong."
The Exhibition Hall itself has the display exhibits built on roller wheels. The reason? That way, companies can hold dinners and local food fairs can ply their wares in the exhibition hall, so it gets to serve a dual purpose -- and though not sexy, is an important part of the overall experience.
What can we learn from an experience designed to define a brand?
- Knowing what you want your brand to be seen as before you design the experience certainly helps a great deal. Do you want it to be traditional, historic? Do you want it to be next generation? Do you want it to be seen as small and creative? Larger and expansive? Teeling obviously defined itself as the "next generation in Irish whiskey making" and the core reflection of that is the creativity in the expressions of the whiskey and the contemporary distilling equipment and process.
- At what touchpoints do you want the customers fully engaged? Partially engaged? Engaged only because they need to be so they can be fully engaged next? The case of Teeling was fully engage them via their deep dive into the "behind the scenes" of the distilling process, use the Welcome video as a short gateway to that, and de-emphasize the history so that they can keep the focus on "the next generation," as the brand's theme.
- What are the instruments of the experience? In the case of Teeling, it's the actual "look inside" the distillery -- both directly into the equipment but also the walking of the floors to see how its all put together.
- How does the experience get integrated into the ecosystem that the brand participates in or is the centerpiece? In the case of Teeling, it's the Newmarket community they reside in -- thus, the exhibition hall is designed via exhibits on rollers to be cleared -- for business luncheons/dinners and food fairs from the surrounding local community.
- Rather than just focus on the touchpoints only, what about the ambiance -- the look and especially feel? With a café available to you to take it easy while you wait or contemplate your visit, as soon as you get in, a comfortable long tasting table, the feel of the place is "relaxed" and while not "fun" per se, its "feel good" about being there.
These are all general points on the crafting of a brand experience. In this case, Teeling design of their brand experience puts a stake in the ground, that defines how they want to be seen and how they are different than Jameson/Midleton or Cooley etc. That way, when a customer or an industry publication thinks about Teeling, they see a company that is creative, progressive and masters of their craft -- the art and science of contemporary distillation. That's what Teeling is going for -- and that's what Teeling gets. They've won 116 awards through mid-2017 in four years. It's hard to argue with that kind of success. Why bother arguing in fact? Just buy some and drink the stuff, peeps.
Why bother with this post? From a self-serving standpoint, this is a taste of the book. I want you to read it when it comes out August 21, 2018 (as of now). That said, that's not really why I wrote this. I wrote this because all of these definitions are essential to understand what you need to do to influence customer perception of your company and to get that predisposed customer to the point of continuous engagement with the company which of course leads to more transactions with the company. That's what you are in business for, n'est ce pas? So, customer engagement, customer experience, consumable experience, and brand experience. Enough to chew on thus enough is enough.