Published in Energy/Utilities

Why Are Some Companies Succeeding at Customer Experience?

Brands are all hyping customer experience and many are succeeding.

Enough with the tired old pitch from consultants about things like: “Why 7 out of 10 strategy implementations fail” or: “The top 5 reasons why companies improve things customers don’t care about” (I wrote that one so I am throwing myself under the bus as well.)

What’s working? In a business world where technologies like block chain, machine learning, chat bots and virtual reality, represent a technology tsunami that numbs the senses, what strategies and tactics are firms using to achieve measureable improvements in customer experience? By the way, to answer this question I hereby promise not to use the words: leverage, convergence, scale, eco-system or coopetition. Speaking plainly, I would suggest from our experience there are 5 common practices we see firms modeling that translate into measureable impact.

  1. They do the math
  2. They engage leaders
  3. They change things that matter
  4. They enroll everybody
  5. They measure the right things

Case Study: American Residential Services (ARS)

Let’s take them one at a time. To be concise I will use one organization we have worked with as an example of each of these 5 points: American Residential Services (ARS), a national provider of air conditioning and plumbing services.

  1. Doing the math. This means that before they go too far in spending real money on introducing improvements, they create a shared understanding about the incremental revenue and margin impact from investing in the customer experience. It doesn’t have to be complicated, but it does have to be fact-based. For example, at ARS we found that a 1 point improvement in their Net Promoter Score[1] (NPS) translated into significant incremental revenue. The math didn’t lie, but it wasn’t the math that would change the experience, it would have to be management.
  2. Engage Leaders: Companies that get real results around the customer experience create unshakeable commitment and alignment across the senior leadership ranks of the organization. That may seem obvious, but it isn’t the obvious things we mean here. It is in the details. It is in the agenda items of weekly operational meetings; it is in what is recognized consistently across the organization; it is in the people who are promoted that demonstrate customer-centric values. My colleague Prof. Len Schlesinger from the Harvard Business School says “strategy only exists in the behavior of leaders.” At most organizations including ARS, this takes work. Through formal and informal meetings, town halls, site visits and customer service calls, the senior team worked hard to create commitment to a new customer promise and set of planned initiatives that ensured achievement of the business case.
  3. Change things that matter: This really is the most misunderstood part of the whole thing. For example, ARS did qualitative and quantitative research to understand which touchpoints in the experience really mattered to customers and what front line behaviors had the most impact in creating Promoters. For example, we learned that on-time arrival had the biggest impact on creating a customer Promoter, but the nature of the business makes on-time arrival on every appointment extremely challenging. But companies like ARS realize that it isn’t just about meeting the need of customers, it is also about meeting the needs of employees and shareholders. So rather than narrowly investing in technology to improve their on-time performance, they created a balanced approach to communications, technology and service standards that improved their performance incrementally, but increased customer satisfaction significantly. Everyone won: customers, stakeholders and associates.
  4. Enroll everyone: And I mean everyone. Legal, compliance, marketing, operations, call center representatives. At ARS the program they introduced was called PROS; a memorable acronym about the four elements in the experience they chose to compete on. It was cascaded, starting with senior management, all the way out to the front line performers in every office. It was reinforced and supported with recognition, training, coaching, service standards and performance support tools. You might say, “wow, that’s a big commitment – wasn’t it risky?” A fair question except remember, they did the math, they had hard data that if they could move the needle on NPS, the revenue would follow and so yes, it wasn’t cheap, not by a long shot, but after the two day launch where all of the top 200+ managers in the company received their PROS training and formulated their local implementation plans, the company’s President & COO Dave Slott said “today we became a better company.” So was it worth it? Well, you will have to wait until the end of this blog post to find out.
  5. Measure the right things: At the end of the day, successful customer experience programs are systematic rather than programmatic. If it is a system, by definition it must include a feedback mechanism. At ARS that included introducing simple, multiple methods for customers to give direct feedback in near real time to front line teams on the specific areas they chose to exceed expectations around. No waiting months to understand how they were doing, teams knew weekly where they stood in terms of delivering on the promise of PROS and could take corrective action at the local level to drive improvements.

ARS is a great example of a company that delivers an exceptional customer experience because they made a choice to exceed customer expectations on four very specific touchpoints. I call this the “hard edge” of competitive differentiation and once chosen, all of the enablers; products, marketing, service standards, front line behaviors etc. line up behind them. As inspiring as the customer experience progress they have made, is the work they continue to do in applying the same process to their employee experience.

The results? Well, within 6 months, ARS saw a 10+ improvement in NPS and a year later they have had even stronger NPS performance. All other financial metrics have exceeded their goals and management continues to exceed profit targets quarter after quarter. This is the momentum that gets created when what we call the “cycle of capability” is unleashed.

Every Company is Different

A lot of companies we study and work with are achieving strong results in delivering a superior customer experience, though perhaps ARS would represent top quartile performance. And these five practices seem to correlate with most of them, though every company is different and what might work in one culture, may not work in another, so reserve a healthy skepticism about articles that prescribe quick fixes to anything as complex or as important as your customer experience. One thing I do know for sure though: if you embrace these five practices, you will be able to leverage your eco-system to scale converging technologies and drive greater coopetition.

Hah! Gotcha!

[1] Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld used under license.