End of Product

Better Mousetrap catThe phrase “Build a better mousetrap, and the world will beat a path to your door” is often used as a metaphor about the power of innovation. If it is so simple, why has building a better mousetrap been so unrewarding? Why have most new product development efforts, that follow this wisdom, resulted in market failure?

Let’s start to peel this onion by asking what “better mousetrap” really means:

  • less expensive?
  • more effective, i.e. kills more mice?
  • more attractive in appearance?

the list can go on, and incorporation of these improvements may motivate a marginal increase in units sold, but the world rarely beats a path to a door proudly labeled “new and improved mousetraps”.

Those, who subscribe to the school of thought pioneered by Clayton Christensen, would argue convincingly that the “world” would rather not beat a path to a mousetrap, preferring the choice not to deal with mice at all. It is easy to understand that customers would prefer to pay for vermin being repelled from their dwellings, rather than to buy, set the traps, and deal with the dead mice disposal. In other words, a mousetrap is not a product at all – a vermin free dwelling is what customers want.

“The customers rarely buy what the business thinks it sells them. One reason for this is, of course, that nobody pays for a product.”  Peter Drucker.

Indeed, customers pay for obtaining a desirable outcome, they “hire” a product to do a “job”. From that perspective, they would likely pay more to obtain that outcome faster and with fewer complexities. In fact, minimizing the steps in the process of obtaining a desired outcome is at the roots of true innovation, the innovation that brings commercial success. In order to be successful an innovator has to be an expert in a “job” that customers would “hire” the new product to do. Yet, most want-to-be innovators are experts in products and/or technologies their companies sell. The critical pieces of the innovation puzzle are missing:

  1. clear understanding of the actual outcomes their customers desire,
  2. intimate knowledge of how customers experience the processes they use to obtain these outcomes, and
  3. empathy to motivate an innovator to find ways to simplify their experience.

Without these three ingredients, the “magic” of innovation is not likely to happen. For all intents and purposes, you are no longer set to design a “product”, but to design a “service” to deliver a simple and consistent experience for your customers, who are trying to obtain the outcome they actually desire. The degree of simplicity and consistency, and nothing else, will truly differentiate your offering from the others and will afford you to extract premium margins.

Posted in Customer Experience CX, Product Management, Product Marketing | Tagged , , | 3 Comments

Airbandb vs Hotels – Which Provides Better Guest Experience

AirB&B vs HotelI recently returned from visiting Italy and for the first time used airbandb.com to find and book accommodations for a considerable number of nights. Now, whenever I share my experiences of this wonderful country with my friends, they eagerly ask for my opinion about the differences between airbandb.com and hotels. It is not surprising if you consider that relatively few people had direct and multiple experiences staying with the hosts of this well publicized, but quite new platform. Most people, who ever traveled, have experienced hotel services.

My personal experience of airbandb.com was relatively positive as the process of room selection, booking and payment is substantially simpler than most hotel booking services. In most cases (81%) the description of properties and their reviews by the guests were specific, authentic and accurate. The price, and ability to pre-pay that eliminates effects of currency fluctuation, offer substantial value advantage over the comparable hotel room rates.

One of the most important attributes of customer experience is consistency of its delivery. Customers want to know that their expectations, created by company marketing messages, are going to be met. Every time. Most of us know what to expect when we book a hotel room. Judging by the analysis of 45K customer reviews, published on sites like tripadvisor.com and yelp.com, on an average 87% of guests have their expectations met or exceeded. I could not extract a similarly sized data set of airbandb.com customer reviews, but the one I got (~3K) has a substantially lower average satisfaction rating of 69%.

It appears the customer experience delivered by airbandb.com is more like Forrest Gump’s “box of chocolates – you never know what you gonna get”.  While not explicitly promising to take care of any potential problems in interactions with hosts, the company does create the expectation of personalized service and local knowledge. I do appreciate the time difference complexity, but 12-15 hour lag in a e-mail response time to a critical customer problem, as we experienced with one of the bookings, is not acceptable. In terms of local knowledge and advice, only 60% of the hosts were willing or capable to provide anything of value.

airbandb guests growth

Airbandb.com started as a “shared economy” platform for low cost accommodation rental, “air mattress bed and breakfast” and was a better alternative to a hostel. Now, many “room” hosts are small hotels, real b&b and real estate investors. That transformation was not clearly understood by me when I made my reservations and my experience did not meet my expectations of authenticity in 3 out of 5 hosts.

In summary, I would recommend to experiment with airbandb.com only if you have more time than money as the cost advantage is indisputable at this time.

 

Posted in Customer Experience CX, Customer Reviews Analytics, Social Media Research | Tagged , , | 2 Comments

Customer Reviews – Trust, but Verify

Customer Reviews-Trust, But VerifyDuring the last two decades customer reviews and ratings became an ubiquitous part of e-commerce. Over 88% of consumers gratefully use them to select goods and services, whether they purchase them online or off. There are numerous studies that tie in availability of customer reviews to increases in sales, occupancy rates and other business benefits. Nevertheless, there are some people who question the authenticity or usefulness of customer reviews and ratings at large. There are certainly examples of attempts to manipulate consumers with fake reviews or inflated scores, but overall the usefulness of publicly available product/service reputation information is undeniable.

While there is a law to protect consumers from predatory marketing practices, it is important for consumers to learn how to assess the meaningfulness of information they use for purchasing selections. I would like to illustrate this point with personal experiences I had during my recent travel to Italy.

After researching the reputation of multiple airlines, that fly between San Francisco and Italian destinations, I booked the flight with Turkish Airlines. The company seem to combine high levels of satisfaction (according to online customer reviews) and very attractive rates.

Turkish Air sNPSWhile in air service and schedule reliability where quite good, the experience of a layover in Istanbul was a complete buzz killer. The airline did not live up to their online reputation by failing to assist us in any way. Upon return, I took a closer look at the online reviews and noticed that nearly 92% of them was published by passengers who traveled within very close distance and did not experience layovers. In retrospect their experiences were not all that relevant in supporting my selection. Iberia, that has similar reputation scores and not prohibitively more expensive, would have been a better choice as much higher percentage of their reviews were published by the inter-continental travelers.

Since I could not get any promised assistance from Turkish Airlines, I used Bookings.com to find the hotel with the airport shuttle service. I booked the site’s highest ranked hotel since my phone’s screen was too small for reading multiple reviews. Upon arrival to the Istanbul’s airport I discovered that the Coresh Suites Hotel shuttle service did not exist, the taxi costs equaled our room rate, the hotel could not possibly be reviewed as high as Bookings.com ratings implied. The bed was tiny and uncomfortable, and the bathroom was not clean. Overall, it was a miserable experience.

A day later I received an email from Bookings.com with request to review my experience. Looking at their request form I understood what caused discrepancy between the hotel high score rating and my actual experience – Bookings.com asks guests to rate a limited number of customer experience attributes, and then algorithmically generates an overall score that they call a customer review. In my opinion such an approach makes their “customer reviews” too easily manipulable and not trustworthy. Therefore from now on I will book my hotels from TripAdvisor.com.

The customer reviews work well when consumers can read actual descriptions of customer experiences and apply them to their own expectations of experience. The details of the described experience, the language and phraseology help consumers to recognize authenticity and ascertain meaningfulness of the content to their own situation. The statistical averages offer very little utility and the algorithmically produced ones are almost as good as “faked”, regardless of the intent.

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Poll Timing Dilemma

Poll Timing DilemmaThe other day I booked a flight on a popular website. As soon as the ticket order transaction was completed, I received a nicely designed request to share my experience with the agency. That request immediately made me feel uneasy because my flight is still a month away. The fact that the booking agency thinks that their job is done, makes me wonder who “owns” the delivery of the actual experience I have paid for? This example of premature polling is not an isolated case or rare occasion. Many of you can probably recall survey requests made before the product, you have ordered, was actually delivered. A poll of my personal contacts reveals that each and every one of them had multiple instances of such requests.

On one hand, a company may initiate the surveys prematurely because they experience low response rate and want to engage their customers as soon as possible, before they forgot who delivered the initial (or intermediate) part of their experience. That is a real concern.

On the other hand, premature customer satisfaction polling is a clear indication that the polling company either does not understand or does not care about the actual experience of their customers.  Neither is reassuring to the customers. Neither motivates them to engage and respond. Therefore, an unintended consequence of the premature poll is the very low customer engagement rate that motivated the company to initiate the premature poll in the first place.

So, what is the right time to ask customers about their perception of the experience you deliver? I don’t think there is a “one size fits all” answer to this question, but ultimately there is no single “right” time to ask for it.

Holistic customer experience is a perception customers develop over multiple steps they travel from the time they realize their need to the time this need is satisfied (hopefully). If you have done customer experience mapping, the times of asking your customers about their experience are closely correlate to the milestones of the map. Your CX map may likely include multiple “partners” within and outside of your organization. Therefore, taking and recording customer satisfaction “temperature” may need to be viewed as a lengthy process, rather than an event of sending an email.

If your primary goal for asking customer’s opinion is to cover your proverbial ass, why would the customers be motivated to engage? If the process designed and communicated clearly as probing of ALL steps along the customer journey for the purpose of assuring consistent and frictionless experience, the customers are more likely to participate. Remember – “Help me to help you”?

Lastly, resist the immediate urge to start looking for a survey technology provider. Nobody needs technology to do a right thing. Technology can help us to do things fast and cheap, whether anybody benefits from it or not. Find the right process first, test it with “free” tools and calendar notes on the small subset of customers, then compare results against the engagement rate of the control group. When the engagement rate increase is acceptable, it’s time to bring a technology partner.

I do understand that the engagement rate is not the end goal, but it does closely correlates with extreme customer satisfaction or extreme customer disappointment. In either case the specific information provided by highly engaged customers will help your company to rite “the ship” or widen the gap between you and your competitors.

 

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How Singularity Kills Customer Experience Management

CurlyCulturally we are conditioned to look for a SINGLE reason, element or root cause to solve any problem. Remember Curly’s “One Thing” in the City Slickers movie? Well, this concept of singularity does not work in customer experience management by definition because of the complexity of customers perceptions’ “management”. Yes, how do you manage someone else’s perceptions? I have addressed this question before, but the answers did not offer a single step path to CX heaven. The answers call for a review of the existing business processes and practices, and that costs money.  Money to pay for analysis and improvement of these processes, money to pay for technology to automate these improvements, money for change and adoption management, etc. These is the money that would surely increase quarterly earnings per share and management bonuses, but instead will possibly increase “what and when”?

US Nobel-laureate economist Herbert Simon, in his 1982 book “Models Of Bounded Rationality” introduced the term satisficing:

“Examining alternatives until a practical (most obvious, attainable, and reasonable) solution with adequate level of acceptability is found, and stopping the search there instead of looking for the best-possible (optimum) solution.”

Satisficing is a valuable survival skill for decision making practitioners, who deal with endless uncertainties, but a liability for strategy/vision developers who are suppose to navigate the course to the best future destinations. That explains why visionary leaders have a better grasp of customer experience concepts than functional managers and corporate executives, who came from their ranks.

Until the advent of Customer Experience rising to prominence, corporate management was very busy minimizing the cost of everything associated with customer support and services, which is a part of the domain. For years they enjoyed the blissful illusion that the technology investments, they have made, allowed them to increase profitability without reduction in customer satisfaction. Is it really that surprising the same technology vendors re-name their products to pitch “new” solutions to the same buyers? The pitch may have changed, but the singular focus on cost reduction did not. And that will turn CEM into another fad like it did turn CRM into more efficient, i.e. inexpensive way to provide sales management reporting and low cost customer support infrastructure.

We preach that long-term growth cannot continue without an adequate improvement of customer experience, but a short-term reality check shows our managers that customers, both consumers and business, are still focused on the price more than the experience. There is strong evidence of trends that make our case more persuasive, but we need to spend less time on playing with “tools” and work more on re-framing the concept of customer experience management as an engine of growth, before it becomes a domain of corporate IT.

 

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