WOCC - Session 1

Day One: WOBI on Customer Centricity
Customer Experience is Everything

Don Peppers
“Without a customer, you
don’t have a business.
All you have is a hobby.”
- Don Peppers
Customer Experience:
What, How and Why Now
©2020 CX Speakers, LLC 2

Product or Customer? What is the Dimension of Competition?
Customer
Needs Share of Customer
Satisfied
Customer Centricity
Market Share
Product Centricity
Customers Reached
Product or Customer? What is the Dimension of Competition?
Customer
Needs
Satisfied Focusing on each customer’s
individual experience
Customer Centricity
Focusing on each product’s
attributes and benefits
Product Centricity
Customers Reached
Customer Experience defined:
“The totality of a customer’s individual

interactions with a brand, over time.”
ü Customer includes both current and prospective customers

ü Individual interactions occur both face to face and via interactive media
ü With a brand: does not include interactions with others about a brand
ü Brand means all selling entities: agents, salesclerks, partners
ü Over time recognizes that customer relationships are ongoing

Like electricity and water, customers
always seek the path of least resistance

Customer Satisfaction ≠ Customer Loyalty
n = 97,176
consumers
However, customer dissatisfaction

is highly correlated with disloyalty!
Source: Corporate Executive Board

The very best customer experience is no experience!

It’s frictionless
Reliable
Valuable
Relevant
Trustable

Reliable
Minimizing friction one problem at a time

NRR = Negative Resolution Rate

It used to be, failures weren’t very visible
In 2004 just 10% of complainers ever voiced their complaints to companies
“But just because customers don’t complain doesn’t

mean all your parachutes are perfect”
- Benny Hill

Social media makes it easier...
By 2018, 31% of complainers voiced their complaints on social media
A 2018 study of 400,000 customer-service complaints on Twitter

identified those responded to or not responded to by the company
Complaining customers who received company responses –
any responses – generated NPS scores 40 to 60 points higher!

The power of “Complaint Discovery”
A Dutch book club used new-member Welcome Calls to
discover any unvoiced complaints...
• New sign-ups were called within their first month
• No sales pitch, just “Are you happy with us? Anything you need?”
What the book club found:

8% increase in sales/member
6% less attrition in 1st year

Are you hearing enough complaints?
Hot water freezes before cold water…

…yet scientists don’t really know why
Some of your MOST emotionally loyal customers

will be those whose complaints you’ve resolved!

Back to our Dutch book club...
A Dutch book club used new-member Welcome Calls to
discover any unvoiced complaints...
• New sign-ups were called within their first month
• No sales pitch, just “Are you happy with us? Anything you need?”
What the book club found:

8% increase in sales/member
6% less attrition in 1st year
Question: How did they know it was the phone call?

Google runs thousands of A/B tests daily
Rule of thumb: For statistical confidence, you need a

test group large enough to yield about 100 respondents

The value proposition must
Valuable
be obvious to both parties

J.J. Thompson
1906
Customer experience
Wave-particle dualityduality
George Thompson
1937

Mayo Clinic sent medical staff to train at two
of the largest companies in luxury hospitality
Medical professionals learned how to treat their

patients the way fine hotels would treat guests
The goal: To make the experience

seem more valuable to patients

Relevant

Random acts of
good service

The “Goldfish Principle”
©2016, Don Peppers 25

Relevant acts
of good service

An airline customer’s needs
Price sensitive, non-business flyers

Schedule and utility buyers
Deal makers
Insecure decision makers
Luxury and comfort seekers
Commercial real estate:
Three different types of customer
Active deal-makers
They don’t stay with a deal long
They need speed and agility
Operators
Want to improve the value of a property
They need synergies with other properties
Buy-and-hold investors
Concerned with costs and long-term ROI
They need operational efficiencies

Truck and tire dealer
Big fleet owners

Require consistency and speed of service
Cost and efficiency are interchangeable
Specialty vehicle companies

Tanks, flatbeds, chemicals, refrigerated, etc.
Require specialized services and products
Mom-and-pop operators
Friendliness and personal service count
Making “deals” on individual transactions

“Make me rich!” “Make me famous!”
Often, customer differences

can be discerned through
simple observation

But sometimes it’s necessary
to interact with a customer
Role player
Constructor
Creator

“Golden Questions”
Golden Questions
A vacation
time-sharing
company
An
automotive
manufacturer A website
selling pet food
and supplies

Every kind of feedback helps us to understand our customer…
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leep
[b

Human beings are creatures of context
“Cnotxet” alolws evreynoe to raed lgnehty

strigns of scarmlbed wrods prefcelty wlel
And “context” is how we interpret our interactions with others
Context gives strength to relationships

“Learning Relationships” - Customization deepens the context…
Save me
Customer interacts to tell you what he time
wants, or how he wants it, personally
Based on this interaction, you customize your product,

service, or some elements associated with it
The more effort the customer invests in teaching you how to customize his
experience, the greater his stake will be in making the relationship work
Because of this added context, the customer will find it more convenient
to continue with you, rather than having to re-teach a competitor
And by collaborating in the process, the customer will
become psychologically committed to your joint success

Look for some aspect of the customer experience that can be
Learning individually specified by the customer
Relationships
Use data from this customer interaction to make the
experience more relevant, adding context to the relationship
ü What do different customers do differently with your product?
ü Can you save your customer time or effort by remembering some detail or
specification?
ü What additional tasks does your customer have to accomplish to gain use out
of your product?
ü What ancillary services do your customers need in conjunction with your
product?
ü Are there particular types of customers with complex problems or
management issues?
Delivering a CX that is relevant to each
customer’s needs requires customer insight…
…and customer insight is directly
analogous to human empathy

Human brains are hard-wired for empathy

40% decline in the “markers for empathy” over last 30 years
Possibly because of fewer face-to-face interactions?

Empathy:
What does it feel like to be the customer?

Empathy Drives the 4th Quality in a Frictionless CX
Reliable Valuable Relevant Trustable

What a Forrester survey of 58,000 U.S. consumers found:
ü 70% of consumers trust the recommendations of friends
ü 50% trust online recommendations from strangers
ü Less than 10% of consumers trust advertisers!

The 2019 Edelman Trust Barometer
In a survey of 16,000 consumers in 8 different countries…
Just 34% of consumers trust “most of the brands”

they themselves buy!

What Does “Customer Trust” Actually Mean?
Reliable Valuable Relevant Trustable
Competence
Good intentions

The problem with a product-centric business:
Customer
Needs “Good intentions” create no value!
Satisfied
Product transactions are independent and unrelated,
each coming from a different and unrelated customer
Product Centricity
Customers Reached
The problem with a product-centric business:
Customer
Needs “Good intentions” create no value!
Satisfied
Cre
dit rd s
ca Mobile c a
rds telecom Gif t
n ks Service
i lb a
Re ta agreements
Every separate transaction is a “finite game”
that the business either wins or loses
Customers Reached
- Joe Rogan, NewsRadio episode, 2007
Marshall McLuhan:
“Marketers will eventually ruin
every party they’re invited to.”

“Cheers” star Norm Peterson
perfectly summed up the
dilemma marketers now face
“Once the trust goes out of a
relationship, it’s really no fun
lying to them anymore.”

But customer-centric companies are playing an “infinite game”
Customer
Needs Because these transactions are all connected,
Satisfied taking place via the same customer
So the customer’s future behavior matters,
even after a single transaction is completed
This “game” doesn’t end

with a single purchase
For a customer-centric company,

good intentions create real value
Customers Reached
Moore’s Law has a corollary
Every 20 years, computers get a

thousand times more powerful

Zuckerberg’s Law
Every 20 years, we interact a

thousand times more with others

And the more we interact,
the more trust we demand
Trust makes interactions more efficient
We use trust as a filter
Interactivity generates transparency

Screw up today, and the
“news” will be permanent
“You
can’t
Un-
Yourself”
- Linda Kaplan Thaler, CEO,
Kaplan Thaler Group
“Dude, you can't take something bad off the Internet.
That's like trying to take pee out of a swimming pool.”
- Joe Rogan, NewsRadio

So competence and even good intentions
are no longer enough for customers
Trustable
Competence
Good intentions
Proactivity

How trustable businesses operate…
Proactivity

Some Trustability “Proof Points”
ty and com Obje

Warran inders par ctiv
efit re m iso e
ben nt
oo
ls
Recomm
ending
Overpayment competit
ors
notices
Host
ing c
usto
revie
ws
mer Proactive refunds

Recovering lost trust
ü Apologize. No excuses. Never use the
words “but” or “however” in an apology!
ü Incompetence is forgivable, but deception
is more serious, and requires serious action
ü Promise better behavior in the future
ü Deliver better behavior in the future
ü Then demonstrate trustability with
pervasive, but unheralded “proof points”

Wells Fargo tries to recover from a disastrous scandal…
2016:
• Massive account fraud
revealed
• CEO fired, fined
2017:
• New executive team
labored to recover
2018:
• Wells Fargo app got a
trustability proof point

Your employees want to work for a trustable company!
At one U.S. telco, after first brainstorming with senior managers for
all the different ways the company could be more trustable…
…our consultants emailed frontline and other workers for any
suggestions they might have on how to be more trustable
We received literally hundreds of new ideas and

suggestions from more than 3000 employees!

Trustable, empathetic behavior is based

on applying the “Principle of Reciprocity”
And there’s no such thing

as one-way reciprocity

dpeppers@cxspeakers.com

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Day One: WOBI on Customer Centricity

Customer Experience is Everything

©2020 CX Speakers, LLC 2

“The totality of a customer’s individual

ü Customer includes both current and prospective customers

©2020 CX Speakers, LLC 5

©2020 CX Speakers, LLC 6

However, customer dissatisfaction

Source: Corporate Executive Board

©2020 CX Speakers, LLC 7

©2020 CX Speakers, LLC 9

©2020 CX Speakers, LLC 10

Minimizing friction one problem at a time

©2020 CX Speakers, LLC 11

©2020 CX Speakers, LLC 12

In 2004 just 10% of complainers ever voiced their complaints to companies

“But just because customers don’t complain doesn’t

©2020 CX Speakers, LLC 14

By 2018, 31% of complainers voiced their complaints on social media

A 2018 study of 400,000 customer-service complaints on Twitter

©2020 CX Speakers, LLC 15

What the book club found:

©2020 CX Speakers, LLC 16

Hot water freezes before cold water…

Some of your MOST emotionally loyal customers

©2020 CX Speakers, LLC 17

What the book club found:

Question: How did they know it was the phone call?

©2020 CX Speakers, LLC 18

Rule of thumb: For statistical confidence, you need a

©2020 CX Speakers, LLC 19

©2020 CX Speakers, LLC 20

©2020 CX Speakers, LLC 21

Medical professionals learned how to treat their

The goal: To make the experience

©2020 CX Speakers, LLC 22

©2020 CX Speakers, LLC 23

©2020 CX Speakers, LLC 24

©2016, Don Peppers 25

©2020 CX Speakers, LLC 26

Price sensitive, non-business flyers

©2020 CX Speakers, LLC 28

Big fleet owners

Specialty vehicle companies

©2020 CX Speakers, LLC 29

Often, customer differences

©2020 CX Speakers, LLC 30

©2020 CX Speakers, LLC 31

©2020 CX Speakers, LLC 32

©2020 CX Speakers, LLC 33

“Cnotxet” alolws evreynoe to raed lgnehty

And “context” is how we interpret our interactions with others

Context gives strength to relationships

©2020 CX Speakers, LLC 34

Based on this interaction, you customize your product,

©2020 CX Speakers, LLC 35

©2020 CX Speakers, LLC 37

©2020 CX Speakers, LLC 38

Possibly because of fewer face-to-face interactions?

©2020 CX Speakers, LLC 40

©2020 CX Speakers, LLC 41

Reliable Valuable Relevant Trustable

©2020 CX Speakers, LLC 42

ü 70% of consumers trust the recommendations of friends