Author Archives: Gerry McGovern

Customer obsession defines Amazon and digital

To stay relevant in the digital landscape, organizations must develop an obsessive customer focus.

In the U.S., more stores are likely to close in 2017 than during the height of the great
recession in 2008. Those retailers who have committed to digital are not finding it easy
either. In 2016, Amazon accounted for 53% of all sales ecommerce growth, according
to EMarketer. Those are astonishing figures.

How is Amazon so much better than everybody else? Because it has a “true customer
obsession,” according to Jeff Bezos. Many organizations have a fake customer
obsession. They talk the talk but don’t walk the walk.

Amazon truly believes in putting the customer first. “Good inventors and designers
deeply understand their customer,” Bezos stated. “They spend tremendous energy developing
that intuition. They study and understand many anecdotes rather than only the averages
you’ll find on surveys. They live with the design.”

The key to success is getting to know your customers better than they know
themselves. “There are many advantages to a customer-centric approach,” Bezos
explains, “but here’s the big one: customers are always beautifully, wonderfully
dissatisfied, even when they report being happy and business is great. Even when they
don’t yet know it, customers want something better, and your desire to delight
customers will drive you to invent on their behalf.”

An obsession with the customer experience is nothing new for the great brands. It’s how
Walmart, Starbucks and McDonald’s grew. Bezos believes that the decay and ultimate
demise of an organization begins when it starts to lose touch with its customers. To
grow, an organization must constantly renew its obsession with its customers.

Instead, many organizations become obsessed with their processes, procedures,
internal structure and culture. They lose touch with their customers. Instead of saying:
“How do I please my customer”, it becomes: “How do I please my manager.” Thus
organizations lose the feel for their customers, and can no longer properly interpret
whatever customer research or data they receive.

A primary objective of digital teams should be to keep the organization in touch with
their customers. To show the rest of the organization what it’s really like to be a
customer. Digital must also create an environment of continuous improvement founded
on the principle that the customer is forever dissatisfied. They will always respond well
to better value offers, to more convenience, to greater speed and simplicity.

The danger is that in many organizations, digital is doing the exact opposite. It is seen
as a way to remove contact with the customer, to get them to self-serve; not necessarily
because it’s better for the customer, but because it’s cheaper for the organization.

These are the organizations that are in the greatest danger. They use digital to reduce
costs, and as a result they reduce touch and contact with (as well as understanding of
and empathy for) their customers. In such environments, latent customer dissatisfaction
blossoms and competitors will pounce.

A customer obsession begins with constantly thinking about the customer, rather than
constantly thinking about the design, the content, the code, the process, or your boss.
Unfortunately, obsessing about your boss is how you progress in most organizations.

This is the Jeff Bezos playbook for preventing Amazon’s demise

 

High traffic does not equal good customer experience

Just because a webpage is popular doesn’t mean that it’s useful. In fact, it could be getting in the way of a more useful page.

“We’ve recently decided to remove Basic rights at work, the most visited advice page on our website,” Hannah Horton from the UK’s Citizen Advice recently wrote. “It gets 70,000 visits a month and is in the top results for lots of queries about work problems on Google.”

If an organization was judging web success based on volume of traffic they would certainly not remove their most popular page. However, Citizen’s Advice does not measure success that way. It measures success based on how successful people are at solving problems.

The page wasn’t working. Firstly, the data told them that people were not searching for this page but were rather searching for much more specific things such as ‘boss doesn’t give me breaks at work’ or ‘how much a week do I get if I go on the sick at work’. The Basic rights page is an overview. It doesn’t answer specific questions like the ones above. There are other more detailed pages that answer these kinds of questions. It had become a search dirty magnet; drawing people in the wrong direction, away from the specialized pages that were better able to answer the questions.

Web traffic statistics can often be quite misleading, particularly on mature websites. Pages can become popular for all sorts of reasons. Lots of overlap can occur. There is a very specific feature in Microsoft SharePoint called Excel Services. It used to offer training and lots of people used to go there to sign up for training thinking that they would be getting training in how to use Microsoft Excel.

Digital must be measured based on customer outcomes. Traffic, visits, time spent, page views; these are not outcomes. In the offline world, when you say you visited the dentist it implies you got something done with your teeth. Would a dentist measure success based on the number of visitors they had asking for directions to the tourist office, or who had mistaken the dentist with the butcher next door?

Another reason the Basic’s page was seen to not be working was because of the very high bounce rate, which was around 70%. According to Google, a bounce rate is “the percentage of visitors to a particular website who navigate away from the site after viewing only one page.” A bounce rate can be a good thing if the page you visit contains the answer you need, but the Basic’s page did not contain specific answers. Added to this, analysis showed that when people arrived at the page, they rarely scrolled down, instead leaving quickly.

The feedback from visitors also indicated problems:

“There appears to be no information about giving notice to your employer.”

“The paragraph doesn’t tell the client much about what action they can take over bullying.”

Suppose you were responsible for GOV.UK and you started seeing a decline in visitor statistics. For example, the Passport fees page numbers had dropped significantly. That’s bad, isn’t it? Well, no. If you search for “UK passport fees” on Google you now get the answer in the search results. So, things are actually getting better because now you are answering people’s questions even faster. Measure success based on the outcome for the customer.

Why we removed the most visited advice page on our website

 

 

What the Pepsi ad tells us about Millennials

The plot for the Kendall Jenner ad was the standard industry fare that has been pedaled for fifty or more years. What was surprising was the reaction to it.

Pepsi makes a product that, when drunk in sufficient quantities, makes you more likely to become obese and diabetic. Therefore, they’ve got a marketing and branding challenge: How to make a sickly product seem cool and hip?

Easy. Don’t focus on the product itself. Focus on the packaging, and wrap the packaging in celebrity. Show only beautiful, slim people drinking Pepsi with the message that if you want to be beautiful, slim and the center of attention, you too must drink Pepsi or Coke or whatever.

Whatever you do, never, ever show loyal customers who gulp down Pepsi on a daily basis, because these people are likely to have stained, rotting teeth and big bellies. Loyal Pepsi customers are quite simply the opposite of cool.

People are emotional fools and so easy to manipulate. Find something that they love and admire, associate your brand with it, and hey presto, watch those dollars roll in. So, the latest Pepsi ad was absolutely nothing new. Since the Sixties, Pepsi has been talking about being a drink for the ‘young generation’ and in the early Seventies, a multicultural cast sang about how they wanted to buy the world a Coke in order to encourage a global obesity and diabetic epidemic.

In the hallowed halls of advertising, the Coke ad is seen as one of the greatest ads of all time, while the Pepsi ad is now being called one of the worst ads of all time. In the early Seventies, when Coke released its obesity ad, the big brands controlled the message. Back then, we lived in an essentially non-thinking, consumerist, controlled society.

Social media is the media of the people. The younger generations today are much more skeptical and cynical about the man and the brand. Of course, they’re still gullible and can be played with clever messaging, but they’re not nearly as gullible as they used to be.

Younger people are much less interested in owning things for the sake of owning things. They want much more authenticity and real experiences. For the brands that have some genuine value to bring to the world, there are lots of opportunities. But for the fake brands with fake experiences and fake messages, there are much more challenging times up ahead.

Yesterday, we went to a restaurant in Greystones, Wicklow, called The Happy Pear. It makes absolutely delicious vegetarian food. (I’m not a vegetarian.) It also makes tremendous use of social media. It has this great sense of being fun, non-preachy, exciting, informative, cool, hip and healthy.

It was packed with Millennials, with queues outside, because to many in these new generations, eating healthy and conscientiously is the new hip. Pepsi tried to hijack this new movement of social activists, and the response was withering as people used social media (their media) to mock and ridicule the brand.

If you’ve got a fake product, more and more people will call you out on social media for being a fake brand.

The Forgotten History Behind That Kendall Jenner Pepsi Ad

Employees are looking for experiences too

Young, talented employees are challenging traditional organizational structures and cultures as never before.

The Industrial Age was about producing and owning stuff. The Digital Age is about shaping and using stuff.

Only 21% of employees agree their performance is managed in a way that motivates them to do outstanding work, according to a 2017 Gallup State of the American Workplace report. Across all regions of the world, employees who said they are “not engaged” and “actively disengaged” outnumber those who are “actively engaged,” according to a UN World Happiness Report, published in 2017. In some regions, disengagement reaches 70%

This is not surprising. Not only are organizations not adapting to the Digital Age, many are reinforcing the very structures that feed disengagement. In a very interesting article championing constructive disobedience, Paul Taylor notes that:
• Organisational complexity has gone up 6 fold since 1955. The number of procedures & rules to fight the same complexity has seen a 35-fold increase. (Joost Minnaar and Pim de Morree)
• In the most complicated organisations, managers spend more than 40% of their time writing reports, and between 30% and 60% of their time on meetings.
• U.S managerial workforce has grown by 90%. In the UK the employment share of managers and supervisors increased to 16% in 2015. (Gary Hamel)

More managers and more bureaucracy equals more organizational rot and employee disengagement. Having found themselves in a hole, traditional organizations have thrown the shovel out and bought themselves a digger.

“Today’s young employees are no longer happy with the mere fact of being able to produce stuff,” Wim Vanryckeghem, a manager at Euroconsumers wrote to me recently in an email. “And, they have no or little trust in traditionally setup organizations built too much on apathy and loyalty. Prepare to answer their frequent “Why?”.”

Wim states that young employees want the organization to have a real vision and a soul. They want to work in a “collective intelligence” environment and a leadership from below culture, which is essentially the opposite of the traditional management setup.

A key issue that Wim points out is that young employees want “to get input on how the things they worked on are appreciated/depreciated by the customers or colleagues.” This is a crucial point.

As societies, we have shifted our focus away from owning the thing to using the thing in order to achieve an experience. It not enough for us to produce things either. We need to see how they are being used. We need to experience the experience others are having as they use the things we have created.

This is the vital feedback that will allow us to grow both professionally and personally. There is no greater satisfaction than to know that what you produce is used and useful. There is no deeper learning than to observe use, make a change, and see if that change improves use. This feedback based on use is at the heart of customer and employee experience. There is no better way to make an employee feel happier than to show them that what they have done has made a customer or another employee happier.

Gallup State of the American Workplace

UN World Happiness Report

How To Become A Disobedient Organisation, Paul Tayor

Wasting time is the worst customer experience

Reducing the amount of time a customer has to spend is one of the best ways to improve the customer experience

The essence of digital is speed. Customers are obsessed with saving time. Those organizations who save customers time are like digital magnets. These days, customers are also obsessed with saving money. They go to the Web to research, to compare, to find the best deal.

The more time an organization takes from its customers the greater the digital threat is. Wasted time is the goldmine of the digital competitor. Your complexity and bureaucracy is your competitors’ opportunity.

According to a customer experience report published by McKinsey in March 2017, an insurance start-up called Lemonade, “allows distressed customers who have lost property to submit a claim via a video message on their mobile phone. The company reviews the message using anti-fraud algorithms, cross-references it against the customer’s policy, and then transfers the appropriate funds to the customer’s bank account. While these are still early days for the start-up, it is declaring speeds for processing claims in matters of seconds.”

The McKinsey report also stated that:

  • A telecom provider used digital to cut its signup time for new customers by two-thirds.
  • A major North American bank reduced the time to sign-up for a deposit account from two weeks to less than ten minutes.
  • Another bank found if it took more than 20 minutes to apply for an account, the net promoter score (NPS) declined; if activating the new account took more than a day, or receiving the debit card and PIN took more than five days, the NPS fell sharply.

Digital pioneers, such as Jeff Bezos and Larry Page, have long been obsessed with saving customer time. Speed is at the core of the Google culture. Page doesn’t talk in seconds; he talks in milliseconds. Bezos seeks to drive down customer time in every part of the business. Fast and convenient—with the customer at the controls—this is the mantra of digital.

If organizations want to truly thrive in the digital landscape they must measure from the outside in. They must truly focus on the customers. They must attack the ‘costs’ a customer has when interacting with the organization. This is what true customer experience excellence is about. This is what real digital transformation is about. A customer-centric mindset, rather than an organization-centric one, will be the true driver of value in the digital age. And it begins with time; an obsession with saving the customer time.

This will be a challenge for traditional organizations. Up until now, most of them have used digital to reduce organizational costs. An automated phone system wastes customer time so as to save money for the organization. A great many websites are poorly designed, poorly managed and short-staffed because organizations want to deliver self-service in the cheapest possible way.

Waste customer time and you will lose customers.

Putting customer experience at the heart of next-generation operating models. By Shital Chheda, Ewan Duncan, and Stefan Roggenhofer

 

Bridging the great organization-customer divide

Organizations obsessed with cost reductions are like gardeners obsessed with weeding. They weed and weed and weed until everything becomes a weed and the garden is bare.

Current customers and employees are seen as costs by most organizations. They need to be weeded and weeded, pulled out as costs at every opportunity. So, digital is wielded as the ultimate weeding machine. Let’s close the physical stores. Let’s automate the phone systems. Watch the costs drop.

Two things happen. Firstly, employees lose even more touch with customers and with why they work. There is nothing more powerful and motivating than feeling that your work has had a positive impact on another human being. Secondly, customers lose human touch with the organization.

Francesca Gino writing for Harvard Business Review reports on studies that show that:
• Fundraisers who were attempting to secure scholarship donations felt more motivated when they had contact with scholarship recipients
• Lifeguards were more vigilant after reading stories about people whose lives have been saved by lifeguards
• Cooks who see those who will be eating their food feel more motivated and work harder.

Digital can be a wall or a window. As a wall, it can separate the organization from its customers. As a window, it can deliver tremendous insights into customer behavior. However, even if it is used as a window, if the employees looking through the window do not see how what they do is impacting customers, then the insights will be poor or worse—focused on exploiting customers.

We must use digital to connect employees with customers. Content is the currency of digital. We must show all the content writers how their content is helping or hindering, simplifying or making more complex, illuminating or mystifying.

How do we do this? By organizing around the customer. By focusing on what they do. By understanding and measuring the tasks they need to complete with the organization. We don’t measure the content itself. We measure the task that the content is designed to support. We focus not just on the cooking, but more importantly on the eating.

The employee is a digital cook. When they see a satisfied customer who has just consumed their content, that is hugely motivating. I was in a room once with a bunch of people responsible for writing policy and standards information for a large intranet. Six months previously, we had measured the performance of related employee tasks. Task A performed poorly, with a 35% success rate. We made a series of recommendations to improve Task A. There were two people responsible for this task and they worked really hard to implement the improvements. When we measured again, the task success had jumped to 75%. When we presented the results there was a spontaneous round of applause from the 30 or so people in the room. The two employees looked so happy and one of them came up to me afterwards and said that it was the first time she truly felt her work had value and worth.

Create an empathy bridge between those who produce and those who consume and wonderful things will happen. Everybody will win: the customer, the employee, the organization.

To Motivate Employees, Show Them How They’re Helping Customers

The surreal crazy, crazy world of branding

After a long time spent working with various different kinds of organisations, I have consistently found the branding department to be the craziest, most surreal and most disconnected from anything remotely approaching reality.

There must be some city of 10 million people somewhere, that we have never heard of, with factory after factory churning out branding people. Because they’re all the same. I’ve worked in more than 40 countries and whenever I meet branding people they dress the same, talk the same, think the same.

The first serious interaction with branding I had was back around 2000. I was speaking at a travel conference. I told the audience that “low fares” was being searched for about 3,000 times a month and that “cheap flights” was being searched for about a million times a month. A hand shot up in the audience. He was a branding expert. “We would never use “cheap flights,” he said. “It would hurt our brand.” And all the other branding experts agreed. Of course, a couple of years later the vast majority of the brands were using “cheap flights” because it was that or go out of business.

Some years later I was in a room full of executives. We had a deep discussion about the products and services of that organization. We talked about pricing, simplicity of ordering, service and support, and how the website could help the organization sell more and increase customer loyalty. Then the branding expert put up his hand. “That’s all very interesting,” he said. “But what about the branding?”

Recently, I dealt with a very large website where onsite search was really important to customers. They had just appointed a new VP of Marketing. As a result, there was the inevitable redesign and ‘rebranding.’ I looked at the new print brochure website and couldn’t believe that they had hidden the search box. The new ‘branding’ guidelines had dictated that there could be no form fields immediately visible on any pages because it would “hurt the holistic feel of the brand.”

Imagine if one of the these branding experts was in charge at Google or Amazon. “Sorry, guys, we have to remove the search box because of holistic feel reasons.” But don’t mention Google or Amazon to these branding guys. Because, to these branding experts, Google and Amazon are not real brands.

Real brands dominate the page with brochureware hero shots of fake customers. Real brands use gushy, meaningless, emotional language. Real brands have thought leadership corporate videos. Real brands have the greyest of grey text. Real brands obsess about font choice. Real brands are fanatical about image.

How 1970s jaded these ‘real’ brands look in the age of social media and mobile. In an age when time has never been more precious, these brands are still full of pompous certainty that they can control the message, that they can control your experience, and dictate your journey. They believe with an arrogant certainty that no matter how poor the product or service is, they can make you feel you’ve had a great customer experience through the magical power of emotional branding.

And these branding experts get the ear of senior management because they whisper the compelling promises: “You are in control. You can control the message. You can control and manipulate the customer.”

Digital makes it harder and harder to control the customer journey. Much better to give the customer more and more control.

 

Information architecture: still vital to digital design

Over the years, the most neglected, and yet most essential, area of digital design has been information architecture.

Recently, a set of presentations for website designs were made to senior management at a large organization. One presentation was based on data. It had carefully analyzed customer behavior and focused particularly on the navigation structure and wording. But it didn’t have that polished graphical look. The second presentation was quite beautiful to look at but the creators used no customer data to create their design. They copied the old navigation, while focusing on eye-catching graphics. Unfortunately, senior management went for the eye-catching design. In 2017, it is indeed frustrating that many in senior management still want brochures instead of effective digital designs.

The number one reason for a poor digital customer experience are confusing menus and links. It was the number one reason back in 1995 when I started consulting on the Web, and it’s still the number one reason for customer frustration and failure. This is based on data and observations of thousands of customers seeking to complete tasks. 8 out of 10 times when I tell management that it’s the menus and links, they barely listen and hardly ever act to improve things.

Information architecture, navigation, metadata, linking; this is all hard, thankless, grinding work. And yet, this is how the Web is built, one link at a time. This is so much of the true value of digital lies. It’s frustrating to know what needs to be done to improve the customer experience and yet not get the required management support and budget. Yet we must persevere because information architecture is such essential work.

What was the killer feature for Facebook photos? Tagging. The ability to add metadata tags in order to name who was in the picture. Since the beginning of the Web, metadata has been essential to findability. I have worked with numerous ecommerce clients, where choosing the right link text had a huge impact on sales. I mean HUGE.

And yet … And yet so few organizations want to invest in doing quality, rigorously tested information architecture design. Always, there is the belief that some new technology will come along and solve the information architecture problem. Enterprise search has a history of incredible awfulness. Why? Because management invested in search engine after search engine but were not prepared to invest in the organization and management of their information.

And now we have chatbots and the “chat interface.” Chatbots have tremendous potential but they are not some magical cure. They are not some plug-n-play technology that doesn’t require us to have a navigation and classification.

How exactly are these chatbots going to chat? From what magic-magic land will they access their answers? Chatbots will require an extremely rigorous information architecture in order to ‘chat’ in a useful way. Otherwise, they’ll pretty quickly become gibberishbots.

Making the interface ‘invisible’ requires even more effort in the design of the back-end information architecture. The more you simplify for the customer, the more internal complexity you must take on. Efficiently organizing information is—and will remain—one of the most critical skills of the digital age.

The Wild West days of search are over

The Wild West days of the Web are coming to an end as people settle down and select their favorite websites as the starting points for an increasing number of their tasks.

In 2014, when Raymond James asked people where they typically start when looking to buy products online, 55% said a search engine, 38% said Amazon. In 2016, 26% said a search engine and 52% said Amazon.

As people mature in their use of the Web, this sort of trend will accelerate. People will find their favorite places and stick with them. Again, this is just one more example of the inherent rewards in building up a loyal customer base. Those chasing leads and new customers will have an increasingly difficult time.

Areas such as search engine optimization will become less and less effective. Traditional banner-driven advertising will approach a vanishing point of effectiveness as adblockers proliferate and attention evaporates.

The old models and practices simply don’t work as well as they used to. Organizations whose business model involves capturing lots of new customers will struggle and fail. Organizations that focus on delivering an excellent customer experience for the customers they already have, will thrive.

As the traditional channels of attention either get closed off or clogged up, the only channel that will remain vibrant is the current customer channel. In essence, social media is the current customer channel. By and large, it is a place where real people tell real stories of their experiences with brands and organizations. Certainly, there are attempts to game social media with fake reviews and fake customers, but it will remain a resilient channel through which quality brands can support their current customers.

The current customer is the new marketer and advertiser. Marketers need to provide the reasons why current customers want to market and advertise the brand. Essentially, that means ensuring that customers are getting a great customer experience.

There is no more important place to deliver customer experience than in support. When the customer has a problem is when they truly discover the real customer experience. Support is the new sales and marketing. That means that the marketing and support departments need to work very closely together.

Support in many organizations has been underfunded, downsized and outsourced. That is because most organizations see support as a cost to be managed rather than an asset to be maximized. It is like having a bucket with a big hole in it. Instead of addressing why the organization is leaking customers, it decides to get a marketing and sales hose to pour more water into the bucket.

That model is well and truly broken, and yet in organization after organization I meet it’s standard practice. It’s like some rigidified custom, some archaic behavior, some unhealthy habit that marketers can’t break. Marketers need to break their obsessive habit of focusing on leads, or else their future will be bleak as they are broken and made redundant by the new customer-centric model.

 

New data shows Amazon is eating into Google’s territory — and it’s only going to get worse

 

 

 

Trust is shifting to the network

Our trust in institutions and the establishment is in severe decline. At the same time, we are getting into cars with strangers and letting strangers sleep in our houses. We are increasingly deciding who to trust based on what the network of our peers says.

Historically, societies have looked to leaders, institutions and deities to get guidance and direction. Global surveys are revealing a collapse in such institutional trust centers. And yet a sharing, service and collaboration economy is rapidly emerging that is highly dependent on trust.

The new brands that are leading in this economy—Uber, Airbnb, Facebook, Google—are not so much trusted in themselves. Rather, the trust is in the network of drivers, home and content owners. Of course, this nascent new economy is constantly under assault with fake news and other attempts to game the system. However, even with such challenges, there are many promising developments.

People are willing to put trust in the wisdom of the crowds. In a survey of 16,000 people by BlaBlaCar, 88% of stated “that they highly trust other BlaBlaCar members with full profiles.” This is just 7% lower than the 92% who highly trust their friends, and 30% higher than the 58% who say they trust their colleagues. The key to trust is having a “full profile”, much of which means being vetted by a significant number of other people who use taxis.

“At Trust Amsterdam,” Irene Dominioni writes for Euro News, “you can walk in and sit at the cozy, vintage tables, enjoy unique vegetarian recipes prepared in the open kitchen, and pay…as much as you think your meal was worth. There are no prices on the menu.” Trust Amsterdam has been successfully running for three and a half years.

On a grander scale, Blockchain is a way to establish trust between two strangers. It taps into the collective processing power of millions of computers in a highly distributed and decentralized way. According to David Siegel, Blockchain can:

  • Eliminate trillions of dollars of wasted effort in coordination, market functions, and clearing.
  • Record data – including ownership rights to anything of value – permanently, in a way that can’t be hacked or stolen.
  • Eliminate middle men – companies that bring buyers and sellers together and charge high fees (everything from banks to insurance companies to ecommerce to Uber)
  • Eliminate data centers, which are targets for hackers.
  • Eliminate IT departments, which are expensive, sluggish, and prevent companies from being agile.
  • Radically transform government services to be far cheaper, faster, and better.

Of course, there is exaggeration here but what is no exaggeration is the latent power of the network. Humans have a capacity to circumvent traditional models of the ‘establishment’ order and organizational structure in a way that is unique in history. The World Wide Web is already a giant hub of human intelligence and connectedness. We are at a point of reinvention of what a society and economy is and can be.

Time to replace capitalism with trust

Decentralstation (Blockchain) David Siegel (Thanks to Andrew Lugton for the info.)

BlahBlahcar survey