We’re just back from the excellent two-day European Customer Experience Event where folks from Zappos and Harley-Davidson talked about how they build their ‘wow’ experience.

It’s our first time there and, to be honest, not the usual beat for us. But it should be – both for us and the insight community in general. Researchers who do anything related to loyalty or customer service should be attending this type of event because they get to meet the folks who actually put their work into practice – customer experience and service heads from major organisations, public and private.

We’ll blog more with some things that caught our eye. But first, in what’s becoming a tradition, here’s a wrap-up chat with three fellow delegates in which we talk highlights, learnings, customer experience in the public sector, digital natives vs. immigrants, behavioural economics, engendering loyalty by charging people (!), transparency and authenticity, convergence, and improvements for next year. Enjoy!

STARRING:

• Brian Koma, VP Research, Vovici
• Sharon Bayliss, London Borough of Hammersmith & Fulham
• Toni Blumeris, MD, Harding & Yorke (S. Africa)

European Customer Experience World event

A lot of folks are drinking the Zappos kool-aid these days. And it’s easy to see why. Because every now and then you come across a company that’s so contrarian in its thinking and execution that it leaves most observers bewildered. Before it was Google with quirky initiatives such as 20% time, something we now know powers its innovation funnel.

Online retailer Zappos is the latest purveyor of contrarian thinking, all in the pursuit of its happiness business model. For example, staff can spend six minutes or six hours on the phone with a single customer – there’s never any pressure to hit productivity quotas. New staff are paid to leave to gauge their commitment. And customers can return shoes up to a year after purchase, postage free, for a full refund. The list goes on.

The result? Booming sales – a couple years ago they broke the $1bn mark. And they were recently acquired by Amazon for – insert Dr. Evil voice – one billion dollars!

Harley-Davidson needs no introduction. It’s an iconic brand that, unlike Zappos, has been around for decades. And for many of us it conjures up distinct emotions such as freedom even if we’ve never experienced their products.

So, why are we telling you all this? Because you’ll learn more about how these companies are building strong cultures which drive profitability in the short podcast below (15 mins). It’s a discussion with the COO of Zappos and a senior marketer from Harley-Davidson, both of whom will be speaking at the upcoming European Customer Experience World event in May – check out the website for tickets and details.

Kindly hosted by Dean van Leeuwen, TomorrowToday’s intellectual adventurer and scholar of the new world of work. He focuses on customer loyalty and talent engagement.

In the chat we learn about…

• The genesis of Zappos quirkiness
• How Harley-Davidson is managing to stay relevant today
• Whether the ‘humanizing the organisation’ movement has staying power
• Examples of initiatives to build a sustainable culture of positive experiences/behavioural economics
• The evidence that these deliver topline and bottom-line results

STARRING:

• Alfred Lin, COO, Zappos
• Markus Kramer, director of marketing operations, Harley-Davidson
• HOST – Dean van Leeuwen, intellectual adventurer, TomorrowToday

Music by Amber Ojeda.

So even though many decry Apple for being a relatively closed platform, the events of the last 24 hours may have brought some people round to Apple’s way of thinking, or at least made them more sympathetic.

But the reality is that partnerships in most sectors are an increasing necessity. As markets mature, product life cycles and development lead times shrink in today’s ever competitive landscape, organisations have to pair up to provide services they couldn’t do themselves, or at least not cost/time effectively.

Apple clearly sees the mobile market as a crucial one. So would it make sense for them to become a mobile carrier to control the experience end-to-end? Well, that would seem overkill. The bad experience involves activation, the general experience using AT&T and other carriers doesn’t seem to be a particularly big issue (or is it?). Apple is not in the pipes business, so why worry about the mobile pipes if it doesn’t worry too much about the fixed broadband pipes?

So, this got us thinking. As the title of this post conjectures, is the Apple/iPhone brand damaged by having a partner that is a weaker link in the brand experience chain? Anecdotal evidence from people being interviewed outside Apple/AT&T stores would seem to suggest (a) many folks attributed the blame to AT&T, and (b) the diehards waiting in line, sometimes for hours, love the iPhone so much that hurricanes probably wouldn’t have stopped them. And although mainstream news covered the travails, we can’t really see it denting iPhone desirability or demand.

But then you wonder, did Apple anticipate this beforehand and decide to accept the consequences because to have improved it (the back-end systems supporting activation) significantly may have cost too much or been too much hassle? Was there a trade-off?

We are, of course, drawing a parallel here with the BAA/BA fiasco a few months ago at Heathrow’s Terminal 5, where some believe BA may have skimped on the staff training to try to save a bit of money. If that were true, it would have been a spectacular own goal given how much it’s cost BA in compensation and negative publicity, not to mention the senior heads that rolled.

Conspiracy theories aside, it seems we need a clearer way of showing senior decision-makers the short and long-term costs of making key decisions like those discussed above. Because just as environmental costs are starting to be factored into the price of goods, businesses need to be aware of the full hinterland affected by the occassional short-sighted decision.

Series:AdTalk
Series:MarketingTalk

The fact that companies like Toyota and Tesco and Proctor & Gamble in many of its categories have shown that you can in fact keep improving delivery on the basics, shows that it’s not just a commodity…

The renowned marketing Professor Patrick Barwise is a relatively rare animal, an academic with commercial instinct and pragmatism. Here he talks to Michael Warren about the ramifications of his two most recent books, ‘Simply Better’ (which won the American Marketing Association’s 2005 prize for the best recent book in marketing), and one that he is currently writing with the working title: ‘Customer Insights – Beyond Market Research’. His ability to cut through marketing myths, hype and meaningless jargon using solid reasoning reinforces his position as one of the industry’s most valued thought-leaders

Listen to other podcasts featuring Patrick

 STARRING 

• Prof. Patrick Barwise, LBS, and co-author, Simply Better
• Michael Warren, research consultant

Timeline [16m21s]
00m00s Intro.
01m18s Why the basis for ‘Simply Better’ is controversial.
02m35s Differentiation that matters.
03m53s Is ‘Simply Better’ now the received wisdom?
04m44s The objectors – Rees and Trout.
06m24s Customers rarely bother to compare all the competing brands, or use all the information available (the lack of economic rationality).
08m32s Beyond ‘thinking outside the box’.
10m33s Paddy’s new book: ‘Customer Insights – Beyond Market Research’.
13m42s Does the new approach mean greater cost?
14m23s Is ‘Insight’ puffery or something that has substance?

Notable Mentions
American Marketing Association.
Behavioural economics.
Harvard Business School Press.
Harvard Business School.
Insight.
Marks and Spencer.
Peter Drucker.
Proctor & Gamble.
Rational economics.
Research Now.
Sean Meehan.
Tesco.
Toyota.
USP.

“Differentiate or Die”, by Jack Trout and Richard Rees.

Quotes
“…the basics are what really matter to customers…and in most markets you can differentiate on the basics…” (Barwise).

“One reason the book has done well is by the time the dust has settled, people realise it’s in fact an optimistic book, a very positive book.” (Barwise).

“The rational economic model is a deliberately over simplified model. I think the trouble is that some economists don’t realise how grotesque and over simplified it is.” (Barwise).

“Very little which is sensible is completely new.” (Barwise).

“Customer complaints, everyone knows, should be a source of insight and improvement but most companies are not sufficiently exploiting that.” (Barwise).

“There’s huge importance in talking to customers directly, having senior managers spending time with customers.” (Barwise).

“…a customer insight in itself achieves nothing unless it is acted on by the people with the power to act, so that it leads to an improved product or service or whatever.” (Barwise).

“Most market researchers know the saying that managers often use research as a drunk uses a lamp post, for support not illumination!” (Barwise).

Music Theatrimus from the PMN

Thanks to Jo Bowman, freelance media and marketing journalist, for her dulcet tones in the intro and outro.

Series:MarketingTalk

 STARRING 

• Bob Morrison, Elephants Can’t Jump
• Peter Walshe, Global Brand Director, Millward Brown
• Rob Holdaway, Clear Ideas

This JuiceCast has been produced by ResearchTalk for BrainJuicer. BrainJuicer’s Chief Juicer, John Kearon, has kindly allowed us to host the podcast as a service to the community, to stimulate debate and innovation

Timeline [15m36s]
00m00s Introduction.
00m46s What’s hot in branding.
01m31s Great brands come when employees and customers agree on perceptions.
01m52s The brand and product experience, sensory marketing.
02m27s ntl: overclaiming, under delivering.
04m45s The Internet and raised expectations.
05m24s Personal recommendation out-influences the Internet.
06m41s Segmentation and targeting in an era of media fragmentation.
07m50s Marks and Spencer: product versus brand versus buzz.
10m07s Making the brand come to life.
10m57s Building a brand through word-of-mouth.
12m21s Differentiation versus being simply better.
13m22s Maintaining a strong brand and Tesco.

Notable Mentions
Abbey.
Apple.
Bebo.
Coca Cola.
Google.
Habbo.
Innocent Smoothies.
iPod.
Marks and Spencer.
Morrisons.
MySpace.
Net Promoters.
ntl.
P J Smoothies.
Red Bull.
Safeway.
Sainsbury’s.
Santander.
Second Life.
Tesco.
The Old Grey Whistle Test.

Thanks to RP Cushing Recruitment for furnishing a location for this conversation

Series:MarketingTalk Series:AdTalk
Series:Commissioned Series:JuiceCasts

 STARRING 

• Matthew Higgins, Head of Brand Communications, First Direct
• Andrew Smith, founder, Andrew Smith Research and ICG member (Host)

PODCAST
Service companies are there to provide a service. But do they generally provide good service? Not according to a report from Andrew Smith Research and ResearchNow which shows just how poorly some sectors are treating their customers.

So what does it take to deliver really good service? We speak to Matthew Higgins, the Head of Brand Communications for bank First Direct, and Andrew Smith, co-author of the report.

Matthew talks about the lengths to which First Direct goes to provide the level of customer service it has become renowned for. But is the increase in internet banking diluting the impact of its customer service? Should all customers, irrespective of the value they generate, receive the same level of customer service? And given its brand strength, does First Direct have any aspirations in the area of brand stretching? These are some of the areas covered in this interesting exploration of a truly customer-centric organisation.

Please let us know what you think of this podcast.

TIMELINE [25m47s]
00m00s Introduction to Matthew Higgins.
01m23s How First Direct manages to excel on customer service.
03m34s The cost of providing good service.
04m36s It’s more than just people.
06m58s Maintaining differentiation.
08m54s Proposition.
13m29s Key performance measures.
15m07s Segmentation.
19m40s Relationship with HSBC.
22m00s Prospects for brand stretching.
24m26s Thoughts on research.

QUOTES
On staff: “…our people talk to customers as equals on an adult-to-adult basis…its isn’t one of those things where you feel like you are talking to a bank…”

On the cost of providing good customer service: “…this thing about service and profitability, it’s not mutually exclusive.”

On recommendation: “…people like to recommend things that they really trust…and recommendation is extremely important to us…a third of our customers have joined us through recommendation.”

On positioning: “We are first and foremost a service-based organisation, we are not a channel-based organisation.”

On new media: “On the web, through chat rooms, blogging etc.…there is a still a tone of voice, a style of the brand to maintain…”

On the proposition: “Our customers are well aware that we are not number one for price…they are prepared to make a trade-off [between price and customer service].”

On RoI: “First Direct took five years to break into profit…now we are making significant profits.”

On segmentation: “…you have to be very careful in terms of the way you may treat different segments of customers based on the relationship you have built up…”

On segmentation: “It may be that you are very open with your customers and you actually talk to them about the value that they give to you, which would be a very un-bank thing to do…”

On parent HSBC: “…the relation between us is very good…First Direct is seen as the testbed.”

Music Brother Love from the PMN

Series:MarketingTalk