Customer Experience 3.0: Book Review

Ahead of our visit to Forrester’s annual CXNYC event in June, I spent a long-haul flight taking notes from John A. Goodman’s Customer Experience 3.0: High-Profit Strategies in the Age of Techno Service.

Drawing on over 40 years of experience across 45+ Fortune 500 companies, and having coined one of our favourite maxims “It costs five times as much to win a new customer as to keep the current one”, Goodman lays out the key strategies he believes that a company should focus on in order to maximise its customers’ experience as well as its profits whilst breaking down the more damaging assumptions at play in the customer service arena.

Customer Experience 3.0: Top 5 Takeaways

  • DIRTF: Doing It Right the First Time! Goodman stresses the importance of setting customer expectations from the very start of the relationship by clearly promising what you intend to deliver. This minimises opportunity for disappointment customer-side and empowers your employees to understand the company mission and deliver their side of the bargain, and more! He recommends mapping your current customers’ journey by considering how they buy, takes delivery, and uses your product, before adding in all the touch points your customer will have with the business, including agents or vendors in order to set you up for the next takeaway. You can also educate the customer as to how they can get the greatest value from your product or service – keep this personalised and be proactive about sharing information and functionality that will matter most to them. Managing the customer’s experience from the very first engagement will have arguably the greatest impact on future loyalty and word-of-mouth referrals.
  • Customer Experience = People + Process + Technology! Once expectations have been set, develop that map to design a business-specific, end-to-end customer experience strategy combining people, process and technology. Goodman encourages businesses to break down any service barriers by keeping all possible communication channels open to feedback, taking advantage of the technical tools and platforms available so that your team can proactively build an emotional connection with customers and have service recovery process in place to solve problems efficiently and in a personalised manner. There are a wind range of CEM and feedback tools to help businesses embed a feedback culture into the heart of their business and as a result, Goodman highlights that technology has become critical to anticipating and tailoring customer experience, especially in the modern age whereby it has become customers’ first choice for interaction. You should end up with a comprehensive CE framework that’s built to support your customers and employees.
  • Empower your employees! Showing confidence and encouraging your front-line staff to manage at least 95% of issues independently will create a culture of customer focus and foster the crucial emotional connection required between staff and customer. In turn, this should also enable your team to identify those individuals who will become ambassadors for your brand. This empowerment should be supported and lauded by all management levels, who can lead by example by proactively delegating responsibilities and in turn making recognition for excellent service a priority in both group meetings and daily 1-1 encounters with peers. Goodman credits customer feedback as the clearest way to measure empowerment and connection internally and recommends the following questions for gaining insight on customer sentiment: “Did the staff member genuinely care about your issue?” or “What one word would you use to describe our company?” He also flags the transactional feedback approach that we use at Customer Thermometer, advising leaders to place the message “How am I doing?” within the signature blocks of emails, so that supervisors can be notified, noting that surprisingly, more positive than negative feedback is usually evoked!
  • VoC requires a systematic approach! VoC is used to deliver systematic information on the experience of current customers. Whilst Goodman acknowledges that VoC objectives and process will vary cross-industry, he notes that ideally VoC initiative for all companies should follow the end-to-end CE process so that it can help the company identify emerging issues as well as recurring problems and assign responsibilities for ongoing improvement. To do this effectively, data should be collected from multiple touchpoints including surveys, transactions and social media and then integrated to provide a wholistic view of customer experience. But you shouldn’t forget to include employee input either – quite often, your team can predict issues and inform you ahead of time. It’s the power of the collective that allows you to build the economic imperative for action and investment in this area. Once you have this insight to hand, Goodman recommends assigning one individual to lead the analysis of data so that they can highlight and prioritise key issues to be addressed, work with the appropriate teams to take action and report upwards.
  • Cost of inaction! Goodman dedicates a significant portion of the book to emphasizing the revenue impact of an effective customer experience programme. Until recently, CE has been largely under-invested in as the revenue pay-off associated with customer retention and referral have been tricky to estimate. However, Goodman stresses that in his experience, the ROI in CE is usually over 100% and how to quantify this. He summarises this using the following rule of thumb: “assume that when a customer encounters a problem, on average, their loyalty is diminished by 20%. Therefore, for each five customers who have problems, one will be lost the next time they have a purchase opportunity.” A practical assignment would be to identify and call ten recently lost customers to un-earth problems that could easily have been resolved within the VOC framework and use these examples when making your case for a CE investment to leadership teams. Goodman also highlights the cost savings to your business led by positive word of mouth advertising, allowing your customers to take the lead in sales and marketing by referring your product and services to others!

Customer Experience 3.0: Top 5 Quotes

  • “Customers must be encouraged to seek assistance when they have questions or problems—a silent, unhappy customer is a less profitable customer. Companies must provide effortless communication channels for customers seeking assistance.”
  • “Companies need to create an empowered service system that allows employees to fully handle a problem, educate the customers on how to receive the most value from the product, and create inexpensive emotional connections.”
  • “If you cannot measure it, you cannot manage it.”
  • “Technology can enhance the performance of your people and your processes in each component of the customer experience via anticipation, proactive communication, and tailoring the experience to each individual customer.”
  • “If you quantify the cost of inaction, you precipitate action.”

Customer Experience 3.0 is an insightful and statistically sound read and I enjoyed the fresh take on the financial implication of CE and how businesses can intelligently implement technology.

Taking examples and speaking from a multitude of customer facing industries, Goodman proves the methods to help quantify the payoff of superior service and quality and customer experience in a way that leadership can accept and comprehend. We will certainly be recommending it to those we speak with in NYC in a few weeks’ time!

Book review by Martha Pawlica, Customer Thermometer’s Client Director.

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