The customer experience blog

For most of us the answer will be a resounding ‘No!’ Yet there are a few banks that manage to gain the affection of their customers. We know that trust and affection are key drivers of brand loyalty, so the million‐dollar question is how can that be achieved in a sector where trust and affection are rare? Let’s look at some topical examples and see what lessons we can learn from them.

Last week, a London trader by the name of Greg Smith, publically resigned from his employer Goldman Sachs, by writing a letter to the New York Times. In it, he attacked the “toxic” culture of the firm which he claimed lacked any kind of client‐focus treating customers as “Muppets”.

Rolling Stone magazine famously branded the bank a “vampire squid” for its single‐minded focus on extracting money from its clients. The bank has established an image of looking after its own interests rather than the customer’s. As a result of media comments like these, Goldman Sachs has seen its brand tarnished and its CEO allegedly under some pressure to resign.

In the same week Satmetrix published its annual Net Promoter Score rankings. This is a survey that measures the extent to which customers are advocates for a brand based on the excellence of the experience they receive. The company that achieved the highest rating of all is USAA, a bank that focuses on the US military. USAA started life in 1922 when 25 army officers clubbed together to insure each other’s cars and today ranks 59th in the Fortune 500 companies in terms of net assets, has a customer base approaching 9 million and the highest levels of customer advocacy in the market. Its values are Service, Loyalty, Honesty, Integrity and its promise is that USAA ‘Stands ready to serve’.

One of the conclusions we reached in our most recent book ‘Bold how to be brave in business and win’ is that we believe that the brands that will win in the future are those that put ‘purpose before profit’. They are highly commercial but believe that profit is a result of having a clear reason for being which creates value for society and customers. Profit can never be the purpose in itself because that leads to an attitude that is self‐serving, short‐term and shareholder‐focused. The general malaise in the banking industry can be traced to this same attitude in our view. But perhaps this is about to change.

On March 5th 2010 the Financial Services Authority granted Metro Bank the first full‐service banking licence in the UK for over a 100 years. The bank launched with one ‘store’ (it thinks more like a retailer than a banker) grew to four in the first year, and today has eleven stores located across London. Like USAA, it achieves high levels of customer advocacy. It is still tiny in terms of market share but, more importantly, what it is already achieving is ‘mind‐share’ ‐ a brand that is talked about for positive reasons.

I recently had the opportunity to interview Anthony Thomson, Metro Banks Chairman and Co‐Founder, to find out what makes the bank different.

"The key to our success is our business model and there are three parts to it: The first is having a differentiated model. The second is having a culture, which aligns to the model, and then the third piece is relentless execution. The UK banks would have you believe that price drives everything, and the great British public and press have pretty much fallen for that line. Of course it’s complete nonsense. If you look at any other aspect of your life, price is not the determining factor, value is.

We think of ourselves as a retailer, not as a bank. We just happen to retail money, so for us, the point of differentiation is saying everything we do will be about the customer experience, not about rate. It’s all about customer value; service, convenience, transparency, consistency and all the other things that represent value for customers. So whilst the UK banks are competing on rate or price, we compete on the customer experience.

We didn’t do any research because if you say to people; ‘would you like a better banking service?’ they say ‘yes’, but their only terms of reference were the existing, not very good, banking models. Our belief is that if you give people a great service they will come to you, they will spend longer with you, they will deposit more money with you. We absolutely are in business to make a profit, but I believe quite passionately that profit should be the by‐product of doing something well. It’s not the reason you go into business.

Of course the thing that we are known for is providing dog bowls in the stores. A journalist once asked me, if our point of differentiation is that we provide dog bowls with water and biscuits? I replied, ‘absolutely, we raised ₤75 million to launch a bank, and our only point of differentiation is plastic dog bowls and dog biscuits!’ Of course, the reality is that the bowls are a very small point, but other banks don’t allow people to bring in dogs. What it says to customers is we don’t mind if your dog pees on the floor, or worse, because we care more about you as a customer than we care about our bank.

The second part is the culture. It is absolutely essential that the culture be aligned to the business model. We’ve all seen examples where a company says one thing, but the culture is actually dissonant of that. For example, pretty much every bank in the UK says that they want to give great customer service, yet all of their frontline staff are incentivised on sales targets, so up to a third of their income is derived from sales bonuses. It’s quite clear to me, if you incentivise people to sell things guess what they’re going to do? All of our customer‐facing staff are remunerated on customer satisfaction scores, which we measure religiously. None of the customer‐facing staff get a sales bonus, and nobody has a sales target. Guess what, if you incentivise people to give great service that’s what they do, and that’s why our customer satisfaction ratings are currently 94%.

But you can only create a great culture with great people. We interviewed 3,500 people for the first 60 customer facing roles. We can teach you to be a banker. We can’t teach you to want to give great customer service, so we recruit for attitude and train for skills. So far this year, we’ve interviewed over 9,000 people and we’ve taken on 1% of them. We are absolutely clear on this, you either get our culture, you buy in to our service ethos, you’re really committed to giving a great customer experience, or you don’t join us. And if you do join us, and we discover that you’re not really committed to it, you won’t last very long. We don’t want ‘fence sitters’.

We say to our people, your job is to amaze a customer, and AMAZE stands for, Attend to every detail. Make every wrong right. If you do something wrong, or if you discover something that’s been done wrong, it’s your responsibility to put it right. The second ‘A’ is Ask if you’re not sure. We have a saying, which is it takes one person to say ‘yes’, but it needs two to say ‘no’, so anybody is empowered to say yes to a customer, but if somebody wants to say no, they have to check with their supervisor first. The ‘Z’ stands for Zest. We’re a very high‐energy organisation. The final ‘E’ is for Exceed expectations. Now, if you’re a fairly junior person in a new environment and you’re not sure what to do, you’ve got a very simple checklist. Am I attending to every detail, am I making every wrong right, am I asking if I’m not sure, am I being enthusiastic, am I exceeding my customer’s expectations?

The third part of our model is execution. Doing 1,000 things just that bit better every day. So for example, we say that we’re open from eight till eight, Monday to Friday. Actually we are not. We open at 7.50am, because there’s nothing worse than if you’ve double‐parked somewhere and you waiting for the eight o’clock start, and somebody turns up with a set of keys to unlock the door. We always open ten minutes early, so that if you do come at eight o’clock we’re open and ready to deal with you.

One of the questions we’re often asked is, why didn’t we buy the bits of Lloyds Bank or RBS that were being sold to accelerate our rate or pace of growth, but our belief is you can’t acquire your way to a better culture. You have to build it one colleague at a time, one store at a time, one customer at a time; it’s slower, but it’s much, much more powerful"

So what can we learn from Metro Bank?

There are a number of the BOLD principles that we can see reflected in the Metro Bank example:

1. ‘Keep the main thing the main thing’. You have to have a crystal clear vision of your purpose and business model and drive this through all of your activities ensuring that everything else is aligned with it.
2. ‘Demonstrate zealous leadership’ Leaders have to ‘walk the talk’ if you are to instill the culture. For example, when I was interviewing Anthony I asked him what the AMAZE acronym stood for and the extent to which it was part of the culture. His answer was to walk me across the building and into a training class for new service people. He asked them to tell me what AMAZE stood for and congratulated them warmly when they did so.
3. ‘Dramatise the customer experience’. Metro Bank providing dog bowls in the branches is not the reason that people bank there, but it is a hallmark of the brand and a manifestation of their intention to ‘provide unparalleled levels of service and convenience to our customers’. Putting a human face (or perhaps that should be ‘canine’!) on banking is another.
4. ‘Be in pursuit of WOW’. This is about innovation that surprises and delights customers. Metro Bank provides a ‘Magic Money Machine’ in each store for the convenience of customers and non‐customers alike. You dump all your odd coins into it and it magically sorts them and converts the value into bank notes or credits your account. You can even play an interactive game to guess the value and win a prize.
5. ‘Create a cult’. Your people are you brand and so it follows that how you recruit them, how you train them and how you remunerate them all have to be consistent with your business model. As Antony said, ‘… if you incentivise people to give great service that’s what they do’. The stronger and more aligned the culture, the more likely it becomes that you will be able to sustain your business model as you grow.

There is no doubt that financial services have to radically re‐think how it operates and the value that the sector brings to society. Fortunately, there are at least two examples of banks that ‘get it’. We can only hope that brands like USAA and Metro Bank will become the norm in the future rather than the exception.

---

Copyright. Smith+Co 2012.

Shaun Smith speaks and consults internationally on the subject of the customer and employee experience. His first book ‘Uncommon Practice-­‐ people who deliver a great brand experience’ investigates how leading brands differentiate; his second book ‘Managing the Customer Experience-­‐ turning customers into advocates’ is considered to be a landmark textbook on how to create branded customer experiences. Shaun’s new book ‘BOLD-­‐ how to be brave in business and win’ co‐authored with Andy Milligan was published in April 2011 and has recently been awarded ‘business e-­‐book of the year’

You can compare your brand with the Bold brands by downloading the FREE ‘Bold how to be brave in business’ App from the Apple iTunes Store.
www.boldthebook.com

For more details about Smith+Co see www.smithcoconsultancy.com.

‘Lack of strategy’ according to Forrester’s annual State of Customer Experience report 2011.

We agree, but strategy in itself – even if it is bold, differentiated and customer-centric – won’t guarantee success. Where we see most companies fail is in the execution.

In our work with brands around the world we see that there is a lack of coherent thinking about how brand positioning, marketing, customer experience and employee experience fit together, and, dovetail they must if you are to be successful. Many of you will be thinking about how to execute your customer experience strategy in 2012 so let’s see what we can learn from a topical example…

A tale of two airlines…

There are two major Asian airlines that have recently posted their 4^th quarter results for 2011. They share some common features; both employ very attractive flight attendants dressed in smart red uniforms; both operate state of the art aircraft with the latest in-flight entertainments systems; both re-defined air travel in their respective markets and shook up complacent competitors; both have enthusiastic customers and are rated tops for service in their markets; each is led by a flamboyant entrepreneur each with his own Formula One racing team. And perhaps not unsurprisingly, Richard Branson and Virgin Atlantic inspired both.

However this is where the similarity ends, Air Asia operating out of Malaysia, declared a 46% increase in profits for Q4 2011 whilst Kingfisher Airlines, the Indian based carrier, reported a doubling of losses between July and September 2011. Air Asia was purchased for 25 cents 10 years ago and today has a cash balance of over half a billion dollars and is expanding rapidly. Kingfisher Airlines is currently $1.2b in debt, contracting rapidly and facing a financial crisis.

So why the difference and, most importantly, what can we learn from them about customer experience strategy?

Air Asia is one of the brands featured in our book ‘Bold-how to be brave in business and win’. In our view, Air Asia demonstrates a number of the characteristics that are shared by the ‘bold’ brands we studied. Its CEO, Tony Fernandes, had a vision of creating a low-cost airline that provides great service and then re-wrote the airline business model to achieve this and, in so doing, virtually guaranteed success. He paid enormous attention to creating a culture and employee experience that reinforced the brand values of simplicity and innovation. When the airline decided to diversify into the long-haul market he started a new brand called Air Asia X because, in Tony Fernandes view, you have to keep different brand cultures and business models separate otherwise “they contaminate each another”. Air Asia was voted best low-cost carrier in the world in 2009 and 2010 and Air Asia X recently won the ‘Best Network Performance’ award for its ability to open up new routes.

Kingfisher Airlines CEO, Vijay Mallya, took a different approach by betting on a five-star service model that went way beyond what any other airline offered. However, this required the market to grow steadily and remain relatively price-insensitive. Kingfisher got off a great start and gained plaudits for its quality product and excellent service experienced by what it calls its ‘guests’. Its cost base was high but it survived by targeting the top of the market.

But then it all started to go wrong. In an attempt to tap into the huge Indian budget market it acquired Air Deccan a low-cost domestic carrier and re-badged it Kingfisher Red. But, instead of keeping the business models and brands separate, Mallya upgraded Kingfisher Red until it started to offer similar service to the master brand but at a lower price. The result was that customers traded down and both brands were compromised- the classic ‘stuck in the middle’ strategy. In the de-regulated airline industry that exists today this is unsustainable because customers will always trade down to find better value if they can.

How to make a bad situation worse…

With costs that were too high and margins that were too low, Kingfisher started cutting and one of the first places it looked to do so was its employees. Over the past months the brand has from suffered low morale, damaging in-flight announcements given by disgruntled employees complaining to passengers that they have not been paid and a reported high-turnover of aircrew and top-talent.

Kingfisher is in a stall from which it may be difficult, if not impossible, to recover.

So what can we learn?

There are a number of principles that we can see reflected in this case study:

Don’t gold plate your customer experience
1) Customer experience is a neutral term and does not imply gold-plated service. Ritz-Carlton offers a great customer experience but so too does Premier Inn. Yet their business models and price points are very different and delivered in distinctive ways. Be careful not to upgrade your customer experience beyond the point that target customers want and are willing to pay for simply because it is what you value.

Treat your customer experience and employee experience as one and the same
2) It follows then that if your strategy is to be low-cost, innovative and simple, your culture and values must reflect that. If your strategy is to offer premium service then you need the very best people who are highly motivated and who want to stay with you. If you start de-valuing them they will leave and that will damage your reputation.

Be clear about what you stand for and stick to it
3) Be clear what you stand for as a brand. You cannot be all things to all people; that way lies mediocrity. So be clear about what you promise and stick to it. The reason that so many acquisitions fail is that organisations merge two strategically separate and distinct brands and then confuse customers and employees by ramming them together.

This also applies if you are growing and seek to expand through launching new products or propositions; make sure that they adhere to your core brand promise and values otherwise they will undermine what your brand stands for and create confusion in the minds of customers and employees. If you do wish to explore a new business model or market then do so by creating a separate brand and culture as HSBC did do successfully with First Direct.

Take a holistic view of the business
4) What you stand for, the operational choices you make, the culture you foster, the experience you deliver, and how you deliver it through your people and processes have to work in harmony to mutually support and reinforce the brand. Each element must work with every other in order for the strategy to work and when you change one element it can have a serious effect on the rest. This means that the business needs to be viewed holistically and strategy executed in the same way. In the words of Ronan Dunne, CEO of O2 “It only works when it all works”.

A differentiating customer experience starts with having a big idea and clear strategy but it lies even more in executing it well so that you can sustain it long term.

---

Copyright. Smith+Co 2011.

Shaun Smith speaks and consults internationally on the subject of the customer and employee experience. His first book ‘Uncommon Practice- people who deliver a great brand experience’ investigates how leading brands differentiate; his second book ‘Managing the Customer Experience- turning customers into advocates’ is considered to be a landmark textbook on how to create branded customer experiences. Shaun’s new book ‘BOLD- how to be brave in business and win’ co-authored with Andy Milligan was published in April 2011.

You can compare your brand with the Bold brands by downloading the FREE ‘Bold how to be brave in business’ App from the Apple iTunes Store. http://www.boldthebook.com

For more details about Smith+Co see http://www.smithcoconsultancy.com.

July 2011 saw the very last launch and landing of the NASA Space Shuttle.
So is this the end of an era for space travel or the beginning of private enterprise creating innovative customer experiences?

“History has shown that many of the innovations that we have come to take for granted were a result of entrepreneurs, pioneers and early adopters willing to invest their own money, and sometimes lives,
in a big idea.”

Richard Branson, Founder of Virgin Galactic.

Let’s face it, most companies wouldn’t innovate if they didn’t have to. It’s not that people hate change – although some do, of course – it’s just that innovation is often so risky, so expensive and fraught with failure. There’s a well known phrase: ‘If it ain’t broke, don’t fix it’, which probably sums up many people’s views about innovation.

But the fact is that innovation is necessary. In fact, now it is mandatory. Increasingly, customers are demanding more from their brands. What was innovative yesterday is commonplace and expected today. This inflationary effect keeps raising the bar and fuelling the need for new, different and better approaches to business.

Digital, mobile and web technology has increased the rate of consumer demands and the speed of response they expect from companies. Time has never been a friend to the businessman but it is now openly hostile. New products have an increasingly limited window before being replaced or copied, in fact they are often superseded or imitated while they are still in development. Think of the speed of replacement of handsets like the Apple iPhone. Competition is everywhere and accelerating the rate at which people can find and buy pretty much whatever they want, whenever they want it.

One problem for many organisations, when they think about innovation, is that typically they focus on the product. However, we know that customers form relationships with brands, not products. And we know that the areas of that relationship that are often given least attention but which mean most to the customer are in communications, service, sales and support.

According to Peter Fisk of Marketing Genius, whereas the vast majority of innovation efforts by companies have been linked to product, the biggest returns on investment have actually been in new business models (e.g. online shopping) and in the customer experience.

Another problem with innovation is that many business people are obsessed with ‘the big idea’, they want ‘game changers’ and are constantly poring over customer data to try to come up with the ‘killer app’. But even more important than these big things are the little day-to-day things that make an enormous difference to consumers and employees, that earn their advocacy and loyalty, cost little but reap financial reward and demonstrate your commitment to creating value for customers. Tesco’s ‘Every little helps’ promise has driven innovation in large and small ways for many years and made this brand the largest grocer in the world.

The organizations we feature in our book, ‘BOLD – how to be brave in business and win’, understand all of this. So what lessons can we learn from their approach to innovation?

Challenge conventional thinking

First and foremost, these organisations challenge the beliefs and norms that prevail in the industries they compete in. For example, how does an airline charge significantly less than its competitors and still make money? The answer so far, has been to unbundle the price of the ticket and charge customers accordingly; a model adopted by Southwest Airlines, easyJet and Ryanair.

Tony Fernandes, Azran and Team – © AirAsia X, 2011

But whilst passengers might be willing to forgo food and amenities for a short flight, it is a different proposition when flying between continents. Passengers want the amenities offered by the regular carriers at a price closer to the low cost operators. AirAsia X is the answer. It is the only long-haul carrier that offers flat-bed seats, seatback entertainment and excellent Asian style service at a cost 60 percent lower than competitors. Azran Osman-Rani, AirAsia X’s CEO, said “We really just started to question every single thing about the airline model and asking if there was different way of doing it.” The innovation came not from a new product but a new business model.

With its promise of ‘Now Everyone Can Fly’, it has extended operations to 20 countries around Asia. It has won numerous awards, most recently voted best low-cost carrier in the world in both 2009 and 2010.

Constantly innovate in both large and small ways

These organizations are possessed by a relentless commitment to improvement, to seeking a better way. Sometimes it can be game changing as in the case of Virgin Galactic’s spaceship VSS Enterprise, but often it is just the everyday focus on innovation in many small ways throughout the business. Just so long as they make things better for customers.

An important aspect of this relentlessness is that these organisations understand that ‘little things have a big impact’. So they are often obsessed by detail and just endlessly curious about even the smallest aspect. Whether it is digger manufacturer JCB’s Chairman Sir Anthony Bamford personally adjusting the hub cap on a back-hoe digger because he noticed it wasn’t quite right, or smoothie manufacturer innocent’s use of language in their packaging. They are all manifestations of the fact that a small action can have a big impact.

Drive innovation from a deep understanding and insight about what target customers value

When Sonu Shivdasani and his wife Eva were planning their luxury hotel brand, Six Senses in the Maldives, they called up tour operator travel agents and asked them what customers complained about. “There were things like the lack of fresh food: everything was imported and tinned” he said. “So we developed our own organic garden which means we can actually offer our guests much fresher and more nutritious salads than they get in London.”

It’s also important to understand that what you sell is not necessarily what customers are buying. RayBan thought they were selling eye protection; Chilli Beans, the Brazilian retailer realised that customers were buying a fashion accessory. This insight led them to create a business model that produced sunglasses of good quality, but exceptional variety – 10 new product designs are launched in 250 stores every week! Because of this, a typical customer will own 3 or 4 pairs of Chilli Beans and visit the store weekly to check out the latest models.

Ensure products, services and your people are distinctive and aligned with the brand promise

Umpqua Bank is a community bank based in the mid-west of the States. It has created a reputation and enthusiastic following for its innovative approach to banking. By calling its branches ‘stores’, recruiting its people from retailers and using innovative marketing techniques that it calls ‘handshake marketing’, the bank seeks to deliver on its promise of being the world’s best community bank. One example of this approach to ‘handshake marketing’ was its use of an Umpqua branded ice cream van which drove around the streets of San Francisco to create brand awareness in this new and important market.

Ray Davis, the CEO of Umpqua Bank says: “Innovation permeates our organisation at all levels. To me, that’s the most important driver of our organic growth. The second route to growth, of course, is through acquisitions. The reason that we’ve been so successful with acquisitions is because we’ve created a very unique culture which aligns our people with the Umpqua strategy and brand”.

Use innovative technology and processes to support the delivery of a superior customer experience

Umpqua, like the other BOLD brands, use social media and their websites to create customer communities. Burberry uses 3D high-tech broadcasting of their runway shows, and Chilli Beans uses music and events to involve customers in the ‘Chilli Bean’ world. O2 drives innovation through continuous customer feedback by involving them in events and their participation in customer communities like giffgaff, its ‘people powered network’.

But the technology doesn’t have to be ‘digital’ or ‘high-tech’ to support an innovative idea. Six Senses refuse to fly in any branded bottled waters to any of their properties. Instead they are investing in their own water filtration and mineralization plants at their resorts to bottle and sell their own water. 50% of the proceeds of these sales go to a water charity to provide clean water in places like India.

Ensure your people demonstrate superior customer service skills and capabilities

Sir John Hegarty, the founding Creative Director of advertising agency BBH, says: “When you’re in an environment such as ours, it is fundamentally important that the creatives feel that what they do is the most important thing in the company; that they are being encouraged to do what they want to do. If you don’t have that, you won’t get them pushing themselves to create the kind of work that they want to create. So it is fundamentally important that I encourage an environment of constant innovation, and that they know that when they do creative work, I am going to take it seriously and I am going to sell it as best I can.”

And that quote should remind us of the final point that all these companies realise about innovation. In the end, it is only important if it is going to make a difference. And if it is going to make a difference, it has to be sold to customers or consumers with passion and with the conviction and commitment that it will be delivered. Having great ideas is all well and good but you have to deliver them in the real world. All the BOLD brands know this: innovation is hard but execution is harder.

By Shaun Smith and Andy Milligan

‘BOLD – how to be brave in business and win’ is published by Kogan Page and available to buy now.

You can download the free ‘BOLD – how to be brave in business and win’ iPad app from the App Store to compare your own organisation with the BOLD brands.

To see a video of the app being used go to www.boldthebook.com

Apple and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. iPad is a trademark of Apple Inc. App Store is a service mark of Apple Inc.

Burberry Worldstore – © Burberry, 2011

“From the store windows, the store touch-points, the website, social media or a magazine: it has to be one pure customer experience, not just to gain market share but to gain mind-share.”

Angela Ahrendts, CEO Burberry.

Never have consumers had so much choice. You can buy whatever you want, whenever you want from hundreds of suppliers. Because of the fierce competition and the efforts of organizations to improve their performance over the past few years, service is generally good too. But good is not good enough. To get the ‘share of mind’ that Angela Ahrendts talks about, you have to be different to your competitors – in fact, you have to be dramatically different and it has to be evident to your customers no matter which channel they choose to buy from, whether it be from the catwalk or their iPad.

The challenge for organizations is how to design and deliver this kind of experience so that it works every day across every touch-point and every channel. The bigger the organization, the harder it is. So how do the brands we researched for our new book ‘BOLD – how to be brave in business and win’ do it?

Firstly….be very clear what your brand stands for and make that as distinctive as possible. As Robert Stephens, the founder of the ‘Geek Squad’ advises; “This is where companies go wrong; they don’t take a bold enough point of view. That’s what brands are for, to make you distinct from other entities”. The Geek Squad does this through their employees whom they call ‘Agents’ These employees are dressed in a distinctive uniform and carry police style badges bearing the company promise ‘We’ll save your ass’. This tone of voice and the distinctive metaphor is carried through every touch-point; from the agents to the call centre (called ‘Mission Control’ of course) to the web.

Secondly….deliver the promise through a customer experience that creates iconic moments for your brand. Blandness is the enemy of creating a memorable experience so it is important to choose to invest in creating touch-points that become hallmarks for your brand. A brand hallmark for ‘Six Senses’ is when guests arrive at the resort, their designated host will invite them to take their shoes off and drop them into a bag labelled ‘No News. No Shoes’. For the duration of their stay guests get to enjoy walking barefoot on the powdery sand even in the restaurant and bars.

Thirdly….empower your people to deliver a consistent ‘experience’ not a formulaic response. Many organizations have tried to control the experience by standardizing it. In many cases these service standards have been set at the level of the lowest common denominator and thereby created robotic service encounters. ‘Have a nice day’ has become a symbol of this ‘design by numbers’ approach to customer experience. The correct answer is to keep a tight control over what your brand promises and the design of the experience but to give freedom to your people to behave in a way that will meet individual customer needs. Zappos has created a culture that empowers its employees to ‘deliver happiness’.

Fourthly….make the marketing of your brand a dramatic experience. JCB, the manufacturer of industrial vehicles was so excited about the powerful diesel engines they had developed for their military range of diggers that they wanted to create a customer experience that would dramatize the benefits. How? By building a vehicle that would use their diesel engines to break the land speed record. Dieselmax reached 670km an hour on the salt flats of Utah. Sir Anthony Bamford, JCB’s Chairman, calls it ‘selling the sizzle’ and it has helped them achieve sizzling results.

Finally….align marketing, operations and HR around the customer experience in order that it is sustained over time. One organization that understands the need to do this is the mobile phone operator O2. The brand realized that in order to deliver its promise of ‘Helping customers connect’, it had to first ensure that it was aligned internally. As Ronan Dunne, O2’s CEO, says:

“When you embark on the journey you can’t stop halfway and say, ‘You know what, I believe in customer experience, but I’m not going to do that’, or ‘we can’t afford to do that’, because it only works when it all works.”

So it is only through taking a holistic view of the customer experience, one that aligns all functions and transcends all channels that you can achieve the kind of mind-share that Angela Ahrends talks about. But when you do that, the results are remarkable.

By Shaun Smith and Andy Milligan

WEBINAR – Innovating Customer Experience…

If you are interested in knowing more about this subject, register here for our free webinar scheduled for 11th August.

‘BOLD – how to be brave in business and win’ is published by Kogan Page and available to buy now.

You can download the free ‘BOLD – how to be brave in business and win’ iPad app from the App Store to compare your own organisation with the BOLD brands.

To see a video of the app being used go to www.boldthebook.com

Apple and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. iPad is a trademark of Apple Inc. App Store is a service mark of Apple Inc.

Zappos Culture – © Zappos.com, Inc, 2011

“A company’s culture and a company’s brand are really just two sides of the same coin. Brand is just a lagging indicator of culture.”

Tony Hsieh, CEO of Zappos.com

It’s time for organizations to pay as much attention to the employee experience as the customer experience…

The essence of a highly distinctive customer experience lies in the emotional connection made with the customer. Research by Ogilvy for their annual BrandZ loyalty survey found that companies “…successful in creating both functional and emotional bonding had higher retention ratios (84% vs. 30%) and cross-sell ratios (82% vs. 16%) compared with those that did not”. This is a significant difference and one that is more than sufficient to negate the effects of any economic downturn. It’s why brands like Burberry, Zappos and O2 have continued to grow their customer base and thrive while their competitors have lost market share and seen declining loyalty from both customers and employees.

To emotionally bond with your customers, you must first engage your employees

So how do you create customer experiences that create an emotional bond with your brand? More and more organisations are coming to the realization that in order to deliver a great customer experience you must first create an engaging employee experience. The challenge is that many marketers are more comfortable with the first 4 ‘P’s of marketing (Product, Price, Place and Promotion) than they are with the 5th ‘P’ of People. How do you get that unpredictable, fickle and shifting population of employees to understand and deliver the brand? In many organisations marketers don’t really look to their colleagues in HR for help because they in turn don’t really understand brand behaviour. So what can we learn from how the BOLD brands have addressed this challenge?

1. Having a purpose beyond profit – This may come as a shock but most employees do not leap out of bed in the morning excited by the prospect of making more profit for their organisation that day. Profit may motivate senior executives but it rarely does so for the front-line unless they are shareholders too, as in the case of the John Lewis Partnership. What motivates employees is feeling connected to the brand promise. That can be ‘Delivering Happiness’ as in the case of Zappos or ‘saving the planet’ as in the case of the World Wildlife Fund. If you ask employees of Umpqua – the community bank based in Oregon – what their brand promise is, they will tell you ‘making customers feel dealing with Umpqua was the best thing that happened today’. Quite a tall order for a bank! Connecting people to a purpose is an important way of helping them feel good about your brand and we know from our research that there is about an 85% correlation between the way your employees feel about the brand and the way your customers do. One organisation that understands this relationship is the mobile phone operator O2, as CEO Ronan Dunne explains:

“If you cannot turn your employees into fans there’s no way you will turn your customers into fans”

2. Hire for DNA not MBA – There are many bright, well-qualified people out there that you can hire, but only a few of them will be the right fit for your brand. Find the people who share your values and then teach them the skills they need; not the other way round. Umpqua advertises for employees in retail trade magazines, not the financial services press, because it wants people who understand customer service rather than banking. Hiring for DNA requires clarity in the first place about what the brand values are at a deep level. As Robert Stephens of the Geek Squad says:

“The values the company possesses should be distinct and define the DNA. They should be impactful with specific language used to define those values; not the saccharine, sugar-coated terms that are meant to please anybody and everybody”



3. Create a cult-like culture – Sustaining a culture is very hard, particularly if you are growing. One of the things these brands do is to reinforce their uniqueness through the use of ‘rites and rituals’. Umpqua has a daily ‘motivational moments’ session where everyone gathers to hear someone sing a song, tell a joke or conduct a short exercise in some way related to their purpose. Zappos encourages their employees to be ‘weird’. They engage in ‘Zuddles’ which are short, motivational work-group meetings. Such iconic events help create and protect a unique culture.

Above all, marketers must make that 5th ‘P’ central to their strategies, and HR’s role must be to help turn the brand promise and values into behaviour. Reg Sindall, Executive Vice President of Corporate Resources for Burberry, sums this up well:

“I set three very basic ground rules for the HR team … The first one is that you are a part of the team, and the team, ultimately, is the brand … The second one is that there is no point in having a hospital without doctors, so you need to be the best technical experts you can be. If someone from another function comes to an HR specialist and says I want your help or advice on something, you’d better know what you’re talking about. But if you just do that then there’s a danger that you’ll offer the latest theoretical advice. And so the third simple rule that we introduced is that, above all else, you’ve got to be commercial. You’ve got to be grounded in the business needs…”

For too long, organisations have been fragmented with each functional silo doing what it thinks best for the organisation. Too often, ‘best’ is defined by functional processes and theoretical practices that are largely undifferentiated. The question the whole organisation has to answer is: “How do we create an employee experience that is going to differentiate our brand and enable our people to deliver the brand promise?” Therein lies boldness.

By Shaun Smith and Andy Milligan

‘BOLD – how to be brave in business and win’ is published by Kogan Page and available to buy now.

You can download the free ‘BOLD – how to be brave in business and win’ iPad app from the App Store to compare your own organisation with the BOLD brands.

To see a video of the app being used go to www.boldthebook.com

Apple and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. iPad is a trademark of Apple Inc. App Store is a service mark of Apple Inc.