Experiment Your Way to Growth

 

High-growth companies discover their opportunities differently. They certainly use strategic planning and analytics, as do most of their competitors. But at their core, they do something else.

Babson Executive Education asked companies their top method to find revenue or cost savings opportunities, then compared that to their growth rates. Whereas low-growth companies tended to favor analytics or strategic planning, over half of high-growth companies focused on experimentation, as shown in the chart on the right.

High-growth companies understand that they can spend endless time debating the latest market research and its implications. They can get teams together for strategic planning off-sites. Or they can leverage the power of their people to quickly experiment to find the best opportunities. Market research and planning are important. But it is the action implicit in experimentation that drives growth. By moving to a culture of experimentation, you can be in your third iteration of an idea before your plodding competitors move the idea out of their planning processes. Read more

Who Creates Your Customer Experience?

Most companies are structured as if the 5% of the workforce at corporate knows more than the 95% who actually talks to the customers. Of course they don’t articulate that. But look at the last twenty changes to your customer experience. Were nineteen generated directly from the field? Or was it closer to one?

You certainly believe in listening to the customer (or you wouldn’t be reading a blog called “Heart of the Customer!”). But do you have a structured methodology to collect ideas from the field, deliberately test them, and then roll them out? Or do you have the equivalent to the often-ignored suggestion box?

In 2006, when High-Definition TVs were just becoming popular, Best Buy had a problem. Accelerating HDTV sales drove significant growth. But underlying this growth was a huge issue with increasing levels of returns. Customers plugged their new $2,000 TV into their existing $20/month cable hookup, and the resulting picture looked terrible. While the Best Buy associates generally told shoppers about the need to upgrade to high-definition cable, most didn’t listen. So when their picture looked awful, they returned their TV.

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Great Clips – Driving Organic Growth through Customer Focus

“At every level in the organization, if people don’t understand what’s going on face-to-face with the customer, it doesn’t matter what else you’re doing.” That’s the advice of Rhoda Olsen, CEO of Great Clips. It’s the same strategy that has driven 30 straight quarters of same-salon revenue growth. But it wasn’t always that way. Back in 2005, “We thought we were a pretty customer-focused organization, as everyone does,” says Olsen. But that year sales and customers dipped for the first time in history. This wake-up call showed Great Clips they needed to better understand the current state of their customer needs. After conducting significant research, they discovered their brand wasn’t very well-defined and category confusion was significant. Customers had a difficult time distinguishing Great Clips’ value proposition from other salons. Read more the full interview, including an analysis of efforts, in Great Clips – Driving Organic Growth through Customer Focus Interview with CEO Rhoda Olsen.

Service Re-Recovery at Hampton Inn and Barnes & Noble

Service recovery is critical for any business.  Of course, the best time to fix a problem is immediately following its occurrence, but this is not always possible.  How do you handle service recovery after the fact, when complaints come from the web, email, or a call?  Let’s look at two very different examples, each based off of previous posts.

Several weeks ago I discussed running out of hot water at a Hampton Inn. The manager on duty paid for my room, but never gave me a time to vent before doing so, actually frustrating me more than the original problem. After creating the post, my daughter Becca suggested I share it with the hotel.  I did so, although I didn’t expect much to happen. You can imagine my pleasant surprise when I received this email from Peggy Messmer, General Manager of the hotel: Read more

A Review of Barnes & Noble In-Store Recommendations (Short link)

It’s March, which means gift-buying season at the Tincher household.  We have three birthdays in eight days – four if you count the cat.  My wife is a fan of the classics, so I bought her The Count of Monte Cristo at Barnes & Noble.

As I went to wrap it the next morning, I noticed something new in the bag – a little slip printed on receipt paper saying “You may also like…” recommending five books based on the three in my shopping cart.  As two of these were gifts, the grouping of recommendations were a bit odd, as you can see here.

Recommendations are powerful, providing social proof and motivation to buy more.  I spoke in this post about the need for retailers to bring their website content into stores.  It appears that this is exactly what Barnes and Noble is doing, utilizing the same recommendations as their website.  Since Amazon estimates a 20% lift from their recommendations engine, this strategy makes good sense.

But the current implementation is not ready for prime time.  Several issues with the execution include:

Read more

A Review of Barnes & Noble In-Store Recommendations

It’s March, which means gift-buying season at the Tincher household.  We have three birthdays in eight days – four if you count the cat.  My wife is a fan of the classics, so I bought her The Count of Monte Cristo at Barnes & Noble.

As I went to wrap it the next morning, I noticed something new in the bag – a little slip printed on receipt paper saying “You may also like…” recommending five books based on the three in my shopping cart.  As two of these were gifts, the grouping of recommendations were a bit odd, as you can see here.

Recommendations are powerful, providing social proof and motivation to buy more.  I spoke in this post about the need for retailers to bring their website content into stores.  It appears that this is exactly what Barnes and Noble is doing, utilizing the same recommendations as their website.  Since Amazon estimates a 20% lift from their recommendations engine, this strategy makes good sense.

But the current implementation is not ready for prime time.  Several issues with the execution include:

Read more

You No Longer Have Only One Brand

Actually, you probably never did.  But you certainly don’t now.  With the growth of the internet and its reviews, social media and blogs, you now have as many brands as you have customer-facing employees.

The 18-year-old at your cash register, the retiree who greets your shoppers and the aggressive salesperson cold-calling prospects are your brand – and they create your brand message to a far greatr extent than does your CEO, your product development group or your advertising.

I was reminded of this as I spoke with a friend whose company has an outsourced pop machine.  Recently, their delivery person began refusing to actually load the soda into their machine.  I don’t know whether this is corporate policy, the result of an overscheduled route, or a difficult delivery person.  But, since every company I know has their machines loaded for them, my suspicion is it’s him.  The brand message is clear:  “We charge you an extra 35 cents per can to drop soda off on your doorstep, and we’re not paid to do any more.”   As you might imagine, this message does not resonate with the customers, and this brand will likely be replaced!

For another example of how the staff is the brand, let’s look at two nearby Caribou Coffee locations.  My local neighborhood spot is fine, but nothing exceptional.  They deliver my far-too-hot tea and generally smile.  Just another coffee shop, with the requisite trivia question and the chalkboard with questions of the day.  The brand message here is, “We have coffee.  And a place to sit and drink it.”

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Are you a Linchpin?

In 2009, Seth Godin wrote Linchpins, on the need to make a difference.  A group of us, motivated by his call to action, led efforts to bring him to town, and have continued to meet afterwards.  These monthly sessions focus on solving business problems – an organization brings in their challenges, and we break into groups and brainstorm suggestions.  The team then comes back in a few months to share their results.  In the past we’ve worked on such diverse offerings as helping an author promote her book, developing a lawn service, and working with America Public Media on new distribution options for Marketplace (the NPR radio show).

Our next effort is on February 29 at the 50th and France Lund’s Community Room.  We will be focusing on HOBY (Hugh O’Brian Youth Leadership) Minnesota.  HOBY sponsors an annual leadership seminar where we expose high school sophomores to community and business leaders, then challenge them to commit to 100 community service hours in the following year.  The graduates from the last four years have combined to serve over 19,000 hours!  You can read more at  HOBY overview for Linchpins.

I hope to see you there!

Jim

Targeting Your Service Recovery to Avoid the “Hail Mary”

Last week I visited a company in St. Louis who put me up in a Hampton Inn. Hampton Inn isn’t at the top of my hotel list, but it isn’t on the bottom, either. It’s a fine hotel, with a hot tub mercifully free of screaming kids. But as I was getting ready for the day I found my hot water disappearing, and had to shave without any hot water at all.

I was mildly annoyed, but that was all. As I stopped by the front desk for another purpose, I waited (and waited!) for the manager who was on the phone. Finally, I gave up and sought out another staff member, asked my question, and casually asked whether they knew they were out of hot water. In my mind, the conversation was over. No big deal.

I was running late, so sat down for a quick breakfast. The manager then sought me out, apologized for being on the phone, then quickly mentioned they were comping my room, saying “We want you to come back here.”

Great service recovery, you might think. But was it?

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Few activities impact a hotel (or indeed, any service company) more than service recovery. Beldona’s and Prasad’s study of hotels in Orlando found that poor service recovery was actually more damaging than having no service recovery at all.

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Three Customer Experience Surveying Principles

The Heart of the Matter

We need to create a standard for customer satisfaction surveys. In this post, I propose the following Customer Experience Surveying Principles:

  1. Make it short;

  2. If you ask it, use it;

  3. Never ask a question when a query will do.

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A few weeks ago I met with another consultant offering customer satisfaction surveys, although as only a small part of his business. The conversation turned to methodology when he said “I just like to put together a few questions, and get something out there quickly.”

When I showed shock at his cavalier approach, he argued, “What you have to realize is that these companies are not in the business of doing customer satisfaction surveys. They just don’t want to spend much time thinking about it.”

I was offended at the remark, but held my tongue. What I wanted to say was “They’re not in the business of doing accounting, either. Do you suggest they do a similar half-a** job of that, too?” I simply could not believe he argued for such a deliberately casual and careless approach towards a customer-facing effort.

Unfortunately, he is not alone in this disregard towards interrupting customers. Why else do we find so many terrible surveys? He is casually regarding two pillars that I hold dear: My customers and my brand. How you treat the first directly impacts how they see the second. But apparently this viewpoint is unique.

How else do you explain JC Penney’s satisfaction survey question: “Please select the number 2 for this question.” I get it – they want to validate the scientific accuracy of the response. But what does this say about their opinion of their customers? “We don’t think you’re paying attention, so we’re going to ask a question that shows our low opinion of you.”

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