Earlier this year, we had the opportunity to host a book launch event for one of our senior advisors, Bill Price, whose new book Your Customer Rules! Delivering the Me2B Experiences that Today’s Customers Demand delves into the profound impact innovations in technology and customer empowerment have had on the way we approach customer service and support.
In an hour-long Q&A session, Bill drew on his years of experience as a customer experience expert, including his role serving as Amazon’s first VP of Global Customer Service, to provide his take on a range of topics, from deciphering what constitutes a great customer experience in the first place, to uncovering the best ways to proactively create, measure, and monitor those experiences.
Bill’s insights were too valuable to keep to ourselves, so we’re including a full video of the Q&A session along with a transcript below.
Customer expectations are going to be painted not by one’s industry and one’s competitors, or whether you doing B2B or B2C, but by the best of any class.
— Bill Price, President of Driva Solutions and OpenView Venture Partners Senior Advisor
Full Video
Transcript
Intro
Brandon: Let’s start with a little bit about OpenView as your partner and who we are. For those of you who aren’t familiar, OpenView Venture Partners is a B2B software venture capital firm. We exclusively invest in the expansion stage, which is a period of time where a company’s run rate is about $5 million to $20 million in revenue per year.
One of our portfolio companies happens to be here today, which is Intronis. There’s about 25 or 26 companies currently in the portfolio that we’re working with. One of the things that’s unique to OpenView is our business model is a little bit different from a traditional venture capital firm. One of the ways that it’s different is we actually have an operational and strategic consulting arm called OpenView Labs. OpenView Labs’ role is really in place to help these portfolio companies get talent and acquire customers faster.
That’s really unique in the venture space in that a lot of these firms are very small. If you were to take the relative size of a venture capital firm with about $700 million in assets like we have, our size would probably be three to four times as large when you look at the headcount. We have about 18 people right now that work in OpenView Labs and exclusively consult these portfolio companies on areas which include customer experience management. Bill happens to be our customer experience management advisor for the portfolio. He’s been here a senior advisor, I want to say, for about four years.
Bill: About that. Yep.
Brandon: So Bill has graciously given me the opportunity to interview him today in front of you all about the “Me2B” customer experience era, his recent book launch — which we’ll talk a little bit more about as well, and you can see copies of the book all over the room — as well as what we have to expect in the next five years in the customer service function and how that’s going to change.
So before I get started, I’m going to go ahead and introduce Bill and I’ll try to make sure I hit on all the points. Bill has an incredibly distinguished background in the area of customer experience. One of his prize accomplishments, I’d say that a lot of people recognize, was he was the first VP of Global Customer Service at Amazon, and we all know where Amazon is today, and a lot of that is thanks to what’s happened with their customer service function.
It’s quite exciting to get to hear a little bit from Bill about that service aspect and how being on the forefront of Amazon has helped change the way he’s seen the market change and lead into a career as a consultant. For 10 years he’s been working as the CEO and founder of Driva Solutions, which is a customer service consultancy. It’s based out of Seattle. He also is the founder of the LimeBridge Alliance, a 33-company global operations council.
So Bill has a significant amount of experience in the area of customer service, beyond most, which is why it’s exciting to have him in front of us today. He also is a graduate of Dartmouth College and the Stanford Business School, as well.
Did you want to add anything on that?
Bill: Oh. Just to give you the dates. I joined Amazon 16 years ago this month, and Amazon is 73 times bigger than when I left. So the company has grown, obviously, in business fields that were different from mine — AWS, you know, the web service and so forth, the Fire products. It’s just a massive company.
I live in Seattle, and Amazon is just dominating the Seattle landscape and the employee base like Microsoft did, Boeing did before. So it’s fun to see it succeed and do very well, but as Brandon said, it was a great proving ground for a lot of the ideas that I’ll talk about tonight.
Brandon: Yeah. And so one other accomplishment Bill has under his belt is that he’s a two-time author. His first book, The Best Service is No Service, was an Amazon bestseller. It was really about how to streamline the contact process and trying to remove unnecessary contacts from the process, and also helping customers access what they need in the way they want to access it.
This latest book is a little bit of a different twist on things. It’s called Your Customer Rules!: Delivering the Me2B Experiences That Today’s Customers Demand. This book is a really interesting one because he takes a look at the way that technology has changed the way the customer experience function works, and changed the way that customers themselves are now different today than they were five years ago, different than they were 10 years ago. As a result, he has coined the term “The Me2B Era” for customer service. He’s going to get into that quite a bit through the course of this conversation, and I’m quite excited to hear what he has to say.
The Rise of the “Me2B” Era
Brandon: All right, Bill. So the first thing I want to talk to you about is what inspired you and David Jaffe to write your latest book?
Bill: David and I worked on the first book back in 2007. That was the main year of writing it, and it came out in March of ’08, as I mentioned. David lives in Australia. He’s an Oxford University graduate from England. He’s an Accenture-trained professional, been a consultant for a number of years, never run customer service, but a very, very bright guy and liked the ideas that I brought out of Amazon, these The Best Service Is No Service type ideas. We were putting them in place beginning in 2003, 2004, 2005. So it was pretty natural when we wrote the first book because we both were practicing it and putting it in place.
The first book had, as its subtitle, “How to Liberate Your Customers from Customer Service, Keep Them Happy and Control Costs.” Much of it was about controlling costs and removing the demand from the equation by doing things right the first time and having better self-service, things like that. But that “keep them happy” piece, I’m glad we put in the subtitle. We talk about it off and on in the first book.
After the first book came out, we had a lot of interest in applying those ideas, but over and over again, the questions came up, “How can you define happiness? How can you define great customer experiences? Is it this measurement? Is it that measurement? What do you do about it?”
So David and I felt we would take some clean sheets of paper, go back out and talk to companies that were recognized as delivering great service, a great overall experience, not just service experience, but customer experience, end-to-end. We interviewed a lot of them in person. We did some by phone. Some of them were offshore companies. We had translators there.
We did some secondary research, and we came up with this idea that there was something not just book length, but actually pretty different about the way these companies were operating, different than their competitors, different than the marketplace in general. So we came up with this concept that I’ll talk about called Me2B. But the idea was we finally convinced ourselves there was something here when we found what we believed was something different. These companies were setting themselves up and operating a different way than others in the marketplace.
Brandon: Great. So what is this Me2B customer experience era that you’re referring to, and what are the events that have triggered it?
Bill: We’ve always said in business affect, when Brandon gave his introduction, that OpenView basically funds B2B companies. So we’ve used expressions like “B2B” and “B2C,” business to consumer. In some cases, if there’s an intermediary like a retail store or a franchisee or a reseller or an independent agent — we can come up with B2B2C and sometimes B2B2B.
We have all these expressions, but every one of them starts with “B.” It starts with “Business.” And even though a lot of companies and a lot of us say, “Oh, everything’s based on the customer. The customer’s really important. We listen to our customer,” there’s this sort of orientation that gets it wrong from the beginning when everything starts with “B,” “B2C.”
So we came up with this expression and said, “What if we flip that around and start putting the title where a lot of folks are saying the emphasis should be, which is Me2B?”
It’s really “me” as the customer. “I need to be involved. I need to be in control. I actually am in control. I have a lot of choices. I can click over very quickly and find another choice. I don’t have as much loyalty as I used to have in some cases, and there are a lot of great software companies out there that want my business, and there are a lot of great online providers of products and services that would love to sell to me. So I really need to be paid more attention here.”
In terms of the “Me2B era,” we sort of didn’t have a specific point of where it started, but it was really with the explosion of the Internet and social media in the mid-2000 period or 2005-6-ish. We touched on it in the first book, but now it’s obvious exploding. And then we came up with this idea of Me2B leaders as a definition sort of for the companies that we felt were delivering great customer experiences, and we tried to disentangle what it was they were doing. So the Me2B era started with some of the technology and some of the enablement to really change that scale from company control to customer control. And then we came up with what are these leaders doing, and who are the leaders, and what are some of their characteristics?
Brandon: Interesting. So what events do we expect to see in the course of the next few years that will further alter the balance of the customer-business relationship?
Bill: Well, it’s fun that Rachel called me. So I’ll go to back to my 22-year-old daughter who just called me. So she’s a senior in college down in New York City at Columbia, and she and her older sister are sort of good symbols or good emblems of this new millennial generation that is coming along in a very big way, the Millennials both as employees and managers and developers and salespeople, as well as customers. And their needs are not as articulated as generations before them, but they’re very, very clear when you start figuring it out.
Millennials want to be loyal. They want to be more loyal than previous cohorts, but they are very, very fast to switch if one event doesn’t please them, and they will be very quick to tell lots and lots of people when that one event doesn’t please them. It could be on social media. It could be in many other venues that they have in front of them.
They also don’t speak up very much. They don’t take the time to answer surveys. So you’re going to see a significant drop-off in response rate for classic surveys. They can’t be bothered with it. In fact, we have a section in the book that I’ll touch on just briefly, but it says, “You shouldn’t ask me what you already know. You shouldn’t ask me how hard it was to do business with you. You shouldn’t have to use surveys for some things that should be obvious.”
So response rates today might be 15%, 20%, if you’re lucky. It’s going to drop because of this new cohort coming through. So it’s going to be harder and harder to get that information in to tell you what’s going on. So I think that’s one of the big changes were going to see, just the rapid movement of that generational group coming in to the employment side and to the customer side.
The other one is going to be even more rapid deployment of technology and enablement of those technology features at the fingertips of consumers. Search engine has been a while, but now comparative search engines and abilities to look at product comparisons very, very quickly by third-party companies. Some customers trust product comparisons on websites. Most of them don’t, but they will trust what customers say in a comparative environment.
So TripAdvisor, most of us probably look at TripAdvisor before we plan a big trip or vacation. We trust, inherently, more of what fellow travelers are saying about their experiences than the hotels proclaim on their website or the airlines say or the other companies say. So there will be much more of that going on with all sorts of splinter groups. TripAdvisor’s pretty big, but there will be smaller and smaller splinter groups that you’ll be able to see where you can find exactly what you want without having ever to talk to the company. And then you make the decision. And then, all of a sudden, the company’s fortunes will go up or go down, and you’re not sure why they go up or down. It’s all these behind-the-scenes things that are going on.
So those are two things, the Millennials and the proliferation of these web comparison type engines, and not just for consumers. For business customers too, business customers increasingly. It’s a little slower in that field, but they’re increasingly getting more interested because they see it and they experienced in the consumer side. They say, “Why can’t I have the same sort of comparative service for software providers or for Web services or for other types of capabilities where I can get some choices?” You’re going to see a lot more of that opening up, the B2B type comparative search engines.
The Future of Customer Advocacy
Brandon: Interesting. So you raise the subject of “customer advocacy.” Where do you see customer advocacy going, and how is Me2B era going to really empower it? And when should we expect that to kind of hit its point of inflection, where it’s a broad thing that everyone’s doing, as opposed to just some of the few select top performers?
Bill: Right. Well, hopefully Your Customer Rules! and “Me2B” will help stimulate some more thoughts in that way. So maybe in a year or two it will be more of a ubiquitous term or expression. I don’t have a good crystal ball to say exactly when it will be, but it’s coming, and it’s coming very, very fast. So if I said three years, it’s probably going to be a year. If I said five years, it’s probably going to be two years. It’s happening much faster than we think, just because of the availability of all these tools and comparative capabilities and word-of-mouth.
So “customer advocacy” is a new term for it, but years ago, 20, 30, 40 years ago, in marketing circles, some of it was called “word-of-mouth marketing,” WOM, and it’s still an expression used today. There are word-of-mouth, WOM, conferences, WOM websites, WOM companies. A friend of mine out in the Seattle area is a good friend now. I teach at the business school level. So does he. He runs a company called WOM. So word-of-mouth was where you trusted the word-of-mouth of other customers, other consumers, to tell you and help guide your decision-making process. So WOM is not used as much anymore, but “customer advocacy” is sort of the new term for it that’s becoming much more popular.
In the consumer world, I’d say, a year or two, max, it’ll be everywhere, and if you’re not into it and embracing it, you’re going to fall behind. I think in the business world, the B2B world, it might take a little longer, but not much longer because of the influence and the positive association as consumers.
But the cool thing, whether you’re in a business-to-business or business-to-consumer, they’re both Me2B. So as consumers you’re saying, “Well, I mean, it’s so easy to do business with FedEx. I can track what I want. They tell me when something’s delayed. They apologize. They handle everything for me. In fact, they usually get things right. So why is it that software companies can’t do things like FedEx does? I want them to do it.” And if executives start saying, “We want our company to be some sort of a compilation of how great of a job FedEx, USAA, Nordstrom, Cisco, other companies do things, then, if that’s the mantra that that company sets up, then that will move even faster in the marketplace.
So we’re seeing, I call this term “last contact benchmarking.” So you can look at direct competitors, but it’s more important to look at what the experiences are of your consumers, business buyers, or end-users. They’re painting increasingly what they expect from you. And they’re even saying things, “Wow. You know, it’s so easy to do business with Amazon. I can return stuff really easily” — we talked about this a little bit earlier in a small group — “but boy, it’s really hard to do anything with you. And returning stuff is actually very complicated, logistically, and from a credit card point of view. If they can do it, why can’t you just give me an upgrade when I need it?”
So I think that’s going to increasingly happen, too, in the next few years.
Customer expectations are going to be painted not by one’s industry and one’s competitors, or whether you doing B2B or B2C, but by the best of any class.
That’s been around for a while as a concept, but it’s going to become even more prevalent.
Blurred Lines: Customer Expectations for B2C vs. B2B
Brandon: Okay. So from what you’re saying, it sounds like these B2B businesses are being forced into performing like B2C businesses, because the customer’s already exposed to the B2C business way of handling experience management.
Bill: Well, if you think about a procurement manager or a person in an engineering team, the procurement manager might be buying something. An engineer might be using something, some software. He or she, every day, has a bunch of customer experiences, and he or she and their families, now broadened, and their kids, and their friends, they all have these type of experiences that, you have to think about, have to paint their expectations. There’s less and less of a tendency to say, “Well, but this is a business-to-business proposition, and that’s over here. We can compartmentalize that, and I’m expecting in the consumer world XY and Z, but I don’t expect it over here.” That expectation is becoming more blurred.
So when we do some of our consulting and talk to executives of companies that are either B2B or B2C, traditional ones, the ones that seem to be moving ahead are the ones where the senior team spends a lot of time talking to senior managers and listening to voice of customer the same way consumer companies do it. They either do surveys, and surveys are a little easier in B2B. They look at the information. They reach out to customers. They’re more proactive. So they’re anticipating this Me2B era is really upon them.
Brandon: What are the triggers B2B businesses should be looking for to know that this transition is really hitting their market and this is something they should capitalize on now, or proactively have done it if it’s already started moving?
Bill: One way to think about it is if you’re providing a service or product which is literally unique, then you’re really lucky, because there aren’t too many of those around anymore. So moving from that group, which is small and dwindling, to companies that have competitors, because most of them have competitors or alternatives. And if you look at a share-of-wallet type concept, what are the alternatives, substitutes and replacements that our customers can obtain? What you’re going to see in the B2B world, you’re already seeing in the B2C world, which is a widening of the customer-loyalty or customer-satisfaction ratings or reactions, which becomes causally connected to the widening of sales success and performance success. In other words, every company in these fields sort of starts out kind of similar.
We have a concept in the book called “the under-nine syndrome.” David coaches kids, and I coached my girls when they were playing soccer. If you have kids playing under-nines, you really can’t control them. They all go for the ball, everyone. I mean, there is no concept of having a position. Everyone goes for the ball, and coaches cry, “No. No. No.” Everyone just goes. It’s too exciting. So after a while your positions start forming. So it’s kind of like that idea, moving from the under-nines to the fact that you’ve got some established roles or responsibilities, and companies start widening.
An example that I use in the B2C world, which makes a graphic, is that the cable industry is usually reviled for bad service and tech support. I do workshops a lot where an entire two hours can be filled up by asking a group like this, “Tell me your worst customer experiences, and then think about your best customer experiences. Let’s do some contrasts,” and the worst customer experiences typically revolve around the cable bill, the cable install. “They didn’t do this,” and various names are mentioned that I don’t want to mention on video here that almost always come up.
So the cable industry used to all sort of gravitate towards that mean of not-goodness. One reason is they had set up, years ago, a monopoly. The cable industry was granted, years ago, a specific territory, and in Seattle it’s only Comcast, where I live. So if you’re going to be cable, it’s Comcast or now there are alternatives. Now I can put a dish on my house. Now I can cut “the cable,” as it’s called, and have streaming video. Now there’s a new system they came up with that allows me to kind of begin to parse out which channels I want. I want HBO. I want Stars. I want this. I want that. I want ESPN. And I don’t want to have 195 channels anymore. We want to be specialized. I want to pick. Me2B, I want to pick what I want.
The cable industry is worried sick about this, because they like selling $150-average tickets and locking you in for two or three years. So the satellite industry and alternatives like Netflix and Amazon Prime for streaming video and these really specialized, combined services are beginning to really eat into the cable company. Now the cable companies are saying, “We do have alternatives. There are competitive alternatives,” and they’re still stuck in this sort of orientation, not mentality, of “Where are they going to go?” Well, now there are places to go. So now you’re beginning to see some widening of the customer satisfaction, even within the cable industry and a widening of customer satisfaction loyalty and growth between cable companies and the non-cable companies.
Look at what Netflix is doing. They made some mistakes a few years ago that we talk about in the book, when they tried to split their services into streaming and physical DVDs, but they got over that. DirecTV’s doing really well. They’re going to be bought by AT&T next month. Dish is doing very well, and these individual services are doing well.
One last point about cable is that a company in my hometown and a former client, T-Mobile, came up with this brilliant idea a year ago saying, “We’re going to stop contracts. Instead of having a required two- to three-year contract, it’s going to be that you’re going to buy the phone for full price, and then you can stop or cancel or transfer anytime you want. And that threw a huge turmoil into the industry.
AT&T, Verizon, Sprint, everyone was counting on two- to three-year contracts, subsidized phones, and the whole thing was renewal rates. T-Mobile said, “We want you to have your choice,” and now the other companies are trying to figure out what to do. T-Mobile has the highest net promoter score, the highest JD Power score for these companies, and they’re continuing to widen that gap. So now the other companies are beginning to follow that.
So what I think — backing off the consumer and the business world, to your question — businesses that don’t think they have competitors, that don’t have substitutes, that don’t have alternatives, do. And the idea is to widen that thought pattern to figure out, “What are the possible other places where our customers can spend their money? And we better either be there, in other words, expand our line to go there, or know what those groups are doing that we’re not doing, so we can defend our turf and go after them, because it’s going to happen in all those industries to.”
This is the stuff I talk about in my business school class and I’m going to start teaching again in three weeks. So I’m really steeped, and it’s all about introduction to marketing management, both B2B and B2C. So there’s an entire lecture on this that I consolidated in seven minutes for you. But it’s a big, big topic.
The 7 Needs of Customers Today
Brandon: All right. When you were talking about the Me2B transition that a lot of these markets are going through today and some will soon start to see the impact from, there’s a fundamental change that happens in the way customers think about and expect things from services. What are these key, fundamental changes? What are those key needs and expectations that are different today than they were five years ago?
Bill: Well, the fun thing that David and I came up with is that they are, on the one hand, different and, on the other hand, the same, if I can put a little bit of an enigma in front of this here, and I’ll explain what I mean by that. One of the earlier subtitles of the book was Back to the Customer Future, and I really like the movie Back to the Future, which came out 30 years ago. It was set to go back from 1985 to 1955. The second movie went from 1985 up to 2015, this year.
But the first one, when he went back there, Michael J. Fox couldn’t believe the personalized service at the gas station. He couldn’t believe how things were very different in the local delicatessen and everything else. So on the one hand, we lost some ideas that have always been around, and our book tries to bring some of those back in new technology and in new phraseology and Millennials, and so forth.
On the other hand, there are some new things that just weren’t around before. They couldn’t be around because of the way technology and other things have grown. So when we did the research, we went out and talked to about 20 companies in depth, and then we researched even more companies that are all sprinkled through the book as stories. And we talked to some companies that were recognized as doing great customer service. And we tried to figure out how you’re doing it. In most cases, they had good answers for that. They had very quick answers. They had lots of history. They had lots of trial and error. And they even shared with us their culture, their mission statement, their vision statement, stories, examples. They were happy to share that. It was almost like we opened up the topic that hadn’t been discussed too much.
We came up with seven different needs, and these needs built up in a hierarchy, and you’ll see it in the book, but the hierarchy starts at the bottom with “You know me. You remember me.” That breaks down into about six sub needs.
What we’re saying is, if you don’t know your customers and you don’t remember them across channels, across time, across their interactions, if you don’t really know that, it’s really, really hard to build anything on top of it.
Because then customers feel like, “Well, wait a minute now. Why do I have to repeat myself? Don’t you remember that I bought $1,000 a product from you last year? And should you recognize that? Shouldn’t you at least acknowledge that? Why do I have to jump through all these hoops?” Things like that. So “You know me. You remember me” is the base piece.
And what our position is, is that has always been important. The corner merchant knew who your mom was. The butcher knew who your dad was when he came in to get the traditional turkey for Thanksgiving or whatever. They knew that because things were hyper-local. The challenge is now that things are global and we move around so much. I just flew in from Seattle last night, and I’m going to fly down to New York tomorrow and go back to Seattle. I mean, you can’t do the same thing. People at Delta Airlines and JetBlue don’t know me by my face, but they need to know who I am. Am I important to them? How much have I flown? I’ve never flown JetBlue before. I’m going to fly them for the first time on Sunday. Never flown. I’m really interested to see how they treat me.
They’re sending me emails, now, every three days, introducing me to the JetBlue experience. I’ve never had that with any other airline, and I’ve flown lots of airlines. I can name almost all of them, but I’ve never flown JetBlue. I’m really interested to see what it’s going to be like.
Anyway, “You know me. You remember me,” and there are two above that, which is “You give me choices. You make it easy for me.” Those are both critical. Making it easy for customers is what they live for. “I don’t want to have to do all these steps. Can’t you eliminate this for me? Can’t you anticipate what I need? Why is it that USAA knows everything about me and you don’t? Or why is it that FedEx can do this for me and you don’t?” And then above that is “You trust me, and you value me.” The trust is a really important point.
There’s a great book by Peppers and Rogers called Extreme Trust. It’s a really good one. It’s almost like a companion piece to ours, in a way, but it really focuses in on how trust is so important within a company, between the company and its employees and between a company and its customers. And we build it out in this Me2B. Then “You value me” is the voice of customer interaction. The top two are “You surprise me with stuff that I can’t imagine” — appropriate surprises, as opposed to just kind of tossing out stuff that you think might work. And then the last one is “You help me be better and do more.”
So those seven needs, we’ve found, have always been around, but they’ve kind of been buried or lost. In other cases there kind of new phraseology because of what we can do with them.
Who Owns Customer Experience
Brandon: So how has the onset of the Me2B era changed the way businesses need to approach customer experience strategy, specifically when we’re talking here about B2B businesses?
Bill: Well, even the term “customer experience” is fairly new. I don’t know who actually coined it or who’s been popularizing it necessarily. Everyone is kind of using it now. But we’ve always talked about “customer service” or “customer support” or “customer care,” but “customer experience” is now kind of that new higher-level concept or construct. And much like “Who owns customer service? Who owns social media?” there’s a question of “Who owns customer experience?” and the winners, the B2B leaders that we talk about, take a very communal answer to that, which is “Everybody owns it.”
Now, there are specific responsibilities. So if everybody owns something in a company, typically balls drop, so the idea is, “No. Everyone owns it, but we have specific responsibilities. Who’s going to do this? Who’s going to do that? Who responds? Who leads?”
I’m working with this local group called Soccer Without Borders and we’re using the classic concept of RACI: who’s responsible; who takes the action; who gets consulted; who gets informed? And having that RACI type concept, starts to really catalog or stratify how you think about ownership of the issues. So customer experience needs to be end-to-end, multichannel and even multi-partner.
There’s no way that Amazon can do a great job in customer service or customer experience if UPS doesn’t pull its weight delivering that to your door. If the manufacturer of the cardboard in Taiwan doesn’t do an awesome job with probably the highest quality cardboard you’re going to see . . . you see Amazon boxes being used over and over again in companies. It’s a great advertisement for the company with that little smile thing there. But they’re great boxes. When I was at Amazon, there was a shipment of boxes, cardboard, that was coming in from Taiwan that was damaged because of weather in the Pacific. And we made a multi-million dollar decision to just basically recycle that entire ship load. Even though only about 20% of it was affected because of the damage, we decided, as a group, 100% of that was going to be not used.
That obsession on details, outside of one’s own company, sometimes it’s called “the ecosystem.” So figure out who the ecosystem is and what the ecosystem is, and make sure they all act like you want them to act. Make sure they all work the way you want them to work. So I think those are some of the elements that we’re going to see in the future of customer experience.
Brandon: When we’re talking about B2B though, a lot of times one of the fundamental differences in a B2B business as opposed to a B2C business is you have a multi-tenant relationship. So you can have users and buyers, and you can have multiples of both of them. That really changes a lot of the dynamics at stake here. How does that alter how you approach customer experience strategy in the Me2B era as we start thinking about these businesses that do have multiple users, multiple buyers? How do you control that because costs can really get out of hand? And how do you think about that?
Bill: Well, it is an easy number one, but I’ll go back even to the consumer world where there are very, very similar models that have been used for many, many years — the “mom buys most things in the house, but the kid uses the product or the family does or the grandparent or something does.” So figuring out what mom needs is really important, but also figuring out who the end-user is within the organizations, of course. Mom is like the procurement director, Procurement VP, and he or she will be that gatekeeper. Mom sometimes consumes but often is able to do this as something for the entire family, and it could be the extended family. Like I said, it could be grandparents. It could be neighbors. So there are similar type models that I like to look at when dealing with this in the B2B world.
But in B2B specifically, procurement generally has a different marching order then do the users. That’s always been a problem in business type operations. Your procurement wants it cheap. They want to get that contract done with very simple SOW terms and so forth. They want to go off and sign the next deal. And users need to have a lot of flexibility. They want to have a lot more interaction.
Then you bring sales in, sales on the customer side in a B2B. Sales has their own issues and what their objectives are. So it’s incumbent upon the “B” — I’ll use that term again — the company is actually developing the software product or services to another business to know all the stakeholders and what they need, in some cases to bring the stakeholders together or to help them figure out what they need, which sounds like it’s B2B, but it’s not. It really is, we have a good sense of what the rhythm is and how people use this now. We want to know how it fits your requirements. So that’s the Me2B side of it.
So they can say, “We want to be able to understand what you’re engineers are doing,” maybe the third-party engineers. So maybe the client or the company is using Infosys or Cognizant or somebody else to do a lot of programming. That’s part of that ecosystem. So what is Cognizant’s requirements? What do they need outside of the business customer itself? I think it applies the same way to businesses as it does to the consumer world.
Measuring Customer Experience: What Works and What Doesn’t
Brandon: One of the things in your first book that you were really preaching about was “Try to remove unnecessary contacts.”
Bill: Right. Right.
Brandon: Can you tell us a little bit about how you can leverage some of those lessons you were teaching in The Best Service Is No Service to help enable you to still have great customer experience in this B2B environment without really driving costs through the roof, by keeping them under control? How can you leverage those lessons best?
Bill: Maybe because I’m so close to it, but we see a fit in some of the companies that we work with, we also see a fit between the two. The first book removes demand or eliminates demand that you don’t want to come into your organization, and so you’ll see a declining rate of customer contacts. You’ll see a declining cost associated with that because of better self-service, better first-time engineering, better user-centered design. Customers and users are actually more engaged in the process. So they don’t complain as much if they were involved in the process.
So you see the demand going down, which means, if you survey users based on the interactions with you, you’ll have a smaller base, which is a good thing from a cost point of view and a customer-experience point of view, from the usage side. That means you have less and less opportunity to actually have interactions with them.
So the combination we see is that it’s incumbent upon companies to then go out more aggressively or more assertively and have proactive contacts, CEO to CEO, Sales to Sales, CEO to Engineering, engineers to engineers, for folks that don’t necessarily make those contacts.
I’m working with a company now that is B2C. But just to give an example, they’ve seen about a 20% year-over-year reduction in the contact rate per customer. And they like that because self-service is working and customers are happier. That fits into the new book’s idea of “You make it easy for me.” They like that. It fits very nicely into that. But they only have a 20% response rate on post-call surveys. So they have a reduction 20% a year in the demand coming in. Only 20% of those people even respond. So wisely they went out and had an independent survey that talks to a wide range of customers, whether they contact them or not.
And the NPS, the net promoter score, between those two audiences is very different, and they asked us to come in to figure out why it is different, and how can we figure out and rationalize what those differences are. The group that calls in seems pretty happy. The broad group of customers who call in and may never have called in is lower. So their first thought was, “Wow. Maybe we’ve got a problem with the survey mechanism.” The problem is that the survey mechanism in the first hand is only a subset. It’s pretty small. The second one is a sample anyway, but it’s a sample of every customer. So at least they get the universe. They get a census. They get a small sampling in the first case of people that have a problem and it got fixed, and they’re fairly happy.
But there are a lot of people that don’t have a problem and don’t call. Big problem. They don’t have a problem. They call. They never do a survey. So you don’t have the data point. So survey mechanisms can be really sketchy, and we rely heavily on these surveys.
I’ve always been a contrarian when it comes to a lot of business concepts. We talked about this in work that I’ve done here in the area as well with Calvin in his company here in Boston. You have to be very skeptical about any of these things. So if you take a contrarian point of view that says, “Well gosh, this survey doesn’t seem to be working for you. How about finding something else?” or “What did you try before that didn’t work? And let’s try it new.” So I think that what we find is that the mechanisms of actually measuring this have to be very, very carefully attuned. Otherwise you’re not going to get any good insights at all.
The Problems with NPS
Brandon: So you’ve arrived at the area of measurement, and in the area of customer experience, it’s widely accepted that NPS is the gold standard. Are you suggesting that we should somehow alter net promoter score in a way to adapt to the Me2B era?
Bill: Full confession, I’ve never been a big fan of net promoter score. I think that the way it was set up and the way it was pitched is beguilingly simple but not actionable.
So if you go down the NPS route, and for those who don’t know it, you ask the question “Would you recommend this to a friend?” That’s the basic question. “The Ultimate Question,” as the inventor of it calls it, a Boston-based guy, Frederick Reichheld. And Fred goes, “If you ask that one question, the ultimate question, you will have a very high association. You’ll have a causal connection,” he says, “to sales growth.” And you ask questions from ten to zero, and anybody that answers ten to nine, meaning, “Yeah. I would recommend to a friend,” you call those your “promoters.” Everybody that says six through zero on an 11-point scale, so six through zero, you call those your “detractors,” and you do the math, and you do promoters minus detractors equals your net promoters.
So by definition, in the math, you throw out anybody that gave you a seven or an eight, which are pretty high scores, but also precariously could go either way. So the way that we see measurements being a problem but also a way for improvement is look at the entire range of all 11. Look at them by customer segment, by customer tenure, by regions or by parts of the country, because that can be very different.
The propensity to complain is very different around the United States, and around the world it’s even more. It could be a 7 to 1 ratio, a propensity to complain around the world, in various countries. And it’s a 3 to 1 ratio in the United States. A lot of complaints in Boston. A lot of complaints in New York. Very few in Seattle. In San Francisco, in Albuquerque, very few.
Now, those complaints are sometimes very, very bad. In fact, sometimes you want to listen more to the Bostonians than you do to the Albuquerque folks, but when you look at NPS by region, there’s very big differences, and taking an average of the regions is also not good. The averages are horrible. You need to look at the whole pail, the whole range. So I’ve always been against averages. Malcolm Gladwell and others have certainly talked about that with very good books, about get the long tail and everything else. Anyway, so that’s one thing.
The second thing, though, is that you have to ask why, “Why is it you’re giving us a 10, an 8, a 4, a 3? Why? What is it?” In the original NPS book called The Ultimate Question, he never even addressed that. Now there’s a lot of backfilling for that, a lot of companies doing a good job of coming up with the whys, and it’s got to be just like you’re doing Six Sigma analysis, the five whys, “Why is this? You gave us a two. Why did you give us a two?”
“Well, it’s because last week you guys butt me from the airplane, and I couldn’t fly back home.”
“Okay. Well, how many times have you flown with us during the year?”
“A hundred times.”
“So it happened once last week. Okay. That’s a valid complaint, and you’re upset, but it’s 1 out of 100. So maybe what can we do next time to make sure you don’t get bumped, or what is it we can do to make sure we don’t bump anybody? So why is it that it happened, and what is it that we can do to own the problem? What can we do in order to make sure that just doesn’t happen again?” So we move everyone up to a higher number.
The other thing about NPS is that it becomes a magic number. “Oh wow. We just had our latest NPS survey, done twice year, and the number moved from 37 to 45. Whoa. Let’s have a little party. Just break out the champagne.” But why? What happened? What do we do well? Because if we don’t know why we did it well, it’s just as apt to go back down again.
Is it sustainable? Was it something that was a blip? Or maybe we’re on the way up to 50, 60, 70. We could be like Google and Apple and Amazon and USAA and Amica insurance. They’re all up there in the 70s, and that’s where a lot of companies want to go, but some companies don’t even know that. They’d say, “Good. We got that done. Check that off. We can tell the board we moved from 37 to 44, and let’s go on to the next thing.”
The other one that’s dangerous is those seven and eights and those people in the middle. Those seven and eights, by definition, in the NPS are eliminated. Think about it, if you get a seven or eight, generally you’re never going to get asked anything about your opinion. “Well wait a minute now. I’m important too.” So it’s a bit of an artificial number, in a way. So we look at another number in addition to NPS. NPS has great value if you ask the whys, if you look at it by regions and things that I talked about by customer segment.
Pros and Cons of Customer Effort Score
The new metric that’s starting to really catch on for a lot of places is called “the customer effort score,” which ties into one or two of the chapters of our new blog, the idea of “Make it easy for me.”
You ask a question, “How hard was it for you to . . . ” and you fill in the blank — “sign up with us,” “upgrade with us,” “return something to us,” “ask questions of us,” “get a problem solved,” “get a problem solved in a timely manner.” You can have lots of different sort of ends to that statement. You could say, “How easy is it?” but usually it’s phrased in a negative way that makes it self-effacing from the company: “How hard was it for you to do business with us?”
And you might ask five-point scale, seven-point scale, four-point scale. There isn’t any magic scale for this right now. But the key thing is that it moves straight into the whys. The reason that CES, customer effort score, was invented by a different group than the NPS group was it begs the question, “Why was it hard? Tell us in your words why it was hard.” “Well, I had to search for this too much,” or “I had to return it too many times. I had to talk to three people. No one got back to me.” That’s really valid information you get from it, which generally the NPS did not do in the past. It can. See, you can fix NPS with the whys. The customer effort score gets you right there right away.
Now, the people that are the big proponents of customer effort score are part of the conference board in D.C., a big membership conference board. And they have a customer experience group in that which includes people from companies like Intuit and others. They were the ones that actually got together and said, “We need either a different metric or a new one,” and they came up with customer effort score. I like it because it fits into getting rid of dumb contacts. It gets into “Make it easy for me.”
We actually think that if you had one dollar to spend, spend it on CES and not on NPS. If you have three dollars to spend, spend two on CES and one on NPS. They can be a nice combination play.
Brandon: So now what I’d like to do is open up to the audience. Do any of you have questions you’d like to ask Bill?
Audience member: I thought the customer effort score, maybe it’s very pointed and actionable, but it’s only really measuring one of those needs. So everything can be easy. That won’t make a loyal customer. You still might not be giving them all the value that they want. I mean, your product might not be great or you might not be wowing them in this one dimension.
Bill: That’s a valid point. The proponents and the researchers behind CES believe that they capture a lot even with the simplicity and the presumed narrowness of just that one question about ease. Now, the net promoter, and I have another class in this that I teach in the school, too. I guest lecture at Stanford to do this one. It’s all about NPS, CES, and maybe what other metrics are out there, some blends.
So the NPS supporters say no. You’re right. NPS is actually designed for that, because it’s a broader way to distill your experiences “Would you recommend this for a friend?” It has to be based on different expectations, different delivery, pricing and so forth, like that. If you get to that level by asking the right questions, then NPS can be valid. But generally companies don’t go to that level of basically separating the pieces of what NPS is all about.
Audience member: The customer may not know or be aware exactly why they’re so pleased or not pleased. They might need help figuring that out.
Bill: It might be hard. Again, it might be their last experience was so damaging to the brand and to their experience that it caused everything that was good up until then. But if you have a conversation with them, they may realize, “Hey. That was one bad thing.” Now, studies have been done over the years that said one bad experience in the business or consumer world requires seven successive very good experiences to balance it, not even to counteract, but seven very good experiences.
So if you don’t have the option for any future experiences, that’s one experience and you’re gone. My daughter’s going to be like that. She’s going to go, “Dad, why should I go back to the restaurant again? I mean, it doesn’t make any sense. I’m not going to give them another chance.” It’s usually one chance. So seven-to-one. I think it might have been Disney and Toyota or something, but it was very interesting. Two different companies did this research, very fundamental fun research. Anyway, it said, “Got to be 7 to 1,” seven successfully good experiences that the customer can somehow keep in their mind.
So going back to your question, Brandon, about what’s happening — the customer’s not going to give us that patience very much anymore. Sometimes they don’t even know how to articulate it. But sometimes they do, and then they remembered, and they kind of say, “Okay. Last time you didn’t do this for me, and I’m not going to tell you what you didn’t do, but I want to make sure you do it better this time.”
So I help provide the brand and the links to the CES research material. There was an article in Harvard Business Review that actually kicked this off about four years ago, it had a provocative title. It was “Stop Trying to Delight Your Customers.” The idea was that there’s a diminishing return in trying to delight customers. You remember this one?
Audience member: That was a great study, because, first of all, they showed NPS had a strong correlation to sales better than any other measure. But I think the other thing it did, which I think is probably good, is it kind of suggested that if you strive to wow the customer, for many companies, that’s a stretch, and you’d be better off, instead of wowing the customer, just to meet their expectation.
Audience member: Instead of saying to your customer contact operation, “You have to go the extra mile for every customer. By the way, you have to get six contacts done an hour,” you know, like constraining the resources I can put into a call you want me to delight them?
For customer service your front line, what’s helpful I think, instead, is if you direct that team to say, “Just make it easier. Make it low-effort,” that’s more achievable by the operations teams, and perhaps it’s a better direction.
Bill: I think it was groundbreaking in the sense that it really got people to think differently about the way products are designed, delivered, priced, serviced, supported, I mean, across the whole spectrum. So customer effort score, “How hard was it?” that type of question can be applied across the whole range. “How hard was it to figure out our pricing?”
And the cable industry, we went over to a cable company that had 85 different pricing policies going on at the same time, and customers got so confused. The customer service reps were even more confused. Mistakes were being made left and right. They were being mis-posted, posted wrong on the invoices. Very stubbed periods, like a three-month promotion was going to and, and a new promotion rolled and automatically, because, if you didn’t read the fine print, there was going to be an automatic role from $10 a month to $60 a month, and customers were irate.
And we sat down next to this rep and looked at her little spreadsheet. There were 85 different pricing plans. I bet you they still have 85 today. Their net promoter score is -13. They have a terrible net promoter score, and they can’t figure out how to dig out of it. Well, if you went from 85 plans to two or five, maybe you’d be better.
And yet marketing in cable companies, a lot of organizations love to have always more plans. They love to shake it up, make it up, your new ideas, “This is the way to keep customers,” and so forth. And it’s the business world, too, not just B2C. So making it simple could be, “How hard is our pricing?” Let me see how hard their pricing is. I can’t figure it out. You ask your employees, “How hard is our pricing to describe?” “Oh. I can’t figure it out.” So I think the ease is really that intriguing thing to start thinking about, and we see more and more pickup of it, either in addition to NPS, or maybe even to replace it as a trigger.
How to Address Struggles to Get Feedback & Provide Custom Support
Audience member: This question is about feedback models. In the world of surfing, I’m getting a low rate of response to surveys. That leads to not very reliable data. It has to be a survey I can do in seconds. If I click and it takes me to different website, I’m done. It has to be fast, and I have to press a button, or I’m not going to do it.
You put the survey in an email and I will answer you it if takes three clicks in an email, but if it jumps to a different page that’s already too much time…
Bill: It’s now hard for me to communicate with you. You’re making it hard for me to give you feedback.
Audience member: So I just think, particularly talking about your daughter, and Millennials, that they aren’t going to talk unless there is really a quick, easy way to do it, or they’ll speak with their feet. How do you gather the feedback?
Bill: Well, I told you the example that could be as much as a 6 or 7 to 1 ratio around the world. When I was at Amazon, we set up Amazon.co.jp in Japan, the first time we open up a website in Japan. It was about the year 2000. And we oversized the customer service center in Japan. We put it in Sapporo in northern Japan, a really great location, and we oversized it because we thought the Japanese consumer is very meticulous, very demanding. Well, they are, but they don’t talk about it.
They feel like it’s difficult to speak back to a company, whether it’s a home company in Japan or a foreign company like Amazon. So the response rate was relative to the orders shipped and so forth, so one-third of that in the U.S., and that was a mature level. We thought it would be really high. So we over-hired, which is not too bad. Better than under hiring.
So what we had to do was we had to then go out to those customers and ask them at critical times, actually reach out to them, and most of them are just loving it. They were so positively surprised that we took the effort, “A big company from America” took the effort, to call up and find out or send them an email that said, “We really want to know what you think about your recent transaction,” or “We know you search for something you never bought. You’ve got 15 things in your shopping cart. Can we help you?” whatever it might’ve been, and just that “You know me. You remember me” and reaching out started to increase a little bit of the communication. It didn’t change the response rate at all in terms of coming in from the customer to Amazon, but it increased the overall number of responses.
Social media is the other new one that’s available. There are some great social media analysis tools out there. Initially they were just word spotting. Now they’re much more contextual, and they tie in with the influence ratings of various people in social media, whether it’s Facebook or whether it’s blogs. Some very sophisticated stuff going on in that field from like Lithium out in California, and Radian6 is now a part of Salesforce.com, and others are continuing to push that envelope. That’s usually kept in another silo in a company. It’s usually not brought in as a voice-of-customer, customer experience issue. It’s typically owned by marketing or somebody else. But when brought to bear, it can have some very, very important trigger affects.
The company I mentioned before that had a census of all their customers, whether they contact them or not, and had a reduction in net promoter score. That same company which is doing the post-contact survey, I think things are going fine. So there’s that discrepancy. They have a pretty rigorous social media program. They didn’t even think about tapping into it to try to help explain these two, like which one is really going on here, because both are samples, and both are pretty limited samples. But social media is very big. It’s also self-selective, but it’s much bigger in terms of the volume.
And they were basically intervening with hot topics. So they were actually doing the first step, which is acknowledging a posting, acknowledging a complaint or acknowledging a suggestion, but they weren’t mining it at all. So now they’re saying, we had to call in this morning, they’re saying, “Yeah. Maybe we should do something about that,” feed that in as well to be another source of information.
And then the fourth one I would say, so in addition to what I said a little bit ago, is having more sort of executive contact or reach-out on a peer-to-peer, executive-to-peer basis and mining some of that. I talked earlier about how field service, for example, is a great opportunity for companies that have a field service install operation to learn what’s going on. Very little of that is captured or mined or used at all, but it’s a great opportunity to find out what goes on.
Audience member: One example is what Warby Parker did with YouTube during their early stage. They would have people posting to them and asking questions on social, on Twitter, and then they would just send back links to videos on YouTube. Those things would just go viral, because people would explain commonly asked questions.
Bill: Well, and going back to my first book, that’s a way that they then don’t have to contact customer service or tech support. It’s crowd sourcing. It’s peer-to-peer. That’s very valued and appreciated by consumers. And if they don’t like it, then they either vote it down or gets yanked off because, “Was this helpful for you?” Everyone says no. Okay. It’s off.
Audience member: Another random example, it’s like what you were talking about earlier you call the company, and you start giving your account number, and then you get on the phone with someone else, and they ask for your account number again. Unbelievable. You just asked me, and I answered it, and you want me to give it to you again?
Bill: This is part of that “Remember me,” because you maybe even started a website, identified yourself, and then maybe they IVR, and they maybe talked to person one, person two, and you have to keep identifying yourself? Like, wait a minute now.
That happens a lot. We have a cartoon in the first book. The same cartoonist helped us in the second book. The cartoonist in the first book asks, near the beginning the IVR asks, “What is your account number? What’s your age? How many minutes should you cook a turkey, a 5kg turkey?” all these questions of the IVR, and then the person’s punch, punch, punching. And then it gets down to the customer service rep that says, “What’s your age? What’s your number? How many minutes for turkey?” and the customer is exasperated.