What to watch out for when researching and testing journeys

Previously:

Why you need to pay attention to customer experience

What to watch out for when researching and testing journeys

 

1. Last Click  can be a costly mistake

The customer journey does not begin with the last click before they visited your ecommerce site. No assumption could be more damaging than this one.

Here’s an example of what happens before “LastClick” (Uses App to order)

 UJ1

You need to take off that blindfold and clean your glasses if you’ve been ignoring this part of the journey.
Once you have got ahead, next you will need to criss cross this journey with the interactions with your competitors if you want to stay ahead for any length of time.  And don’t forget all those potential customers who have been influenced by this on-line saga.

For an interesting interactive tool that can be filtered by industry classification to get a glimpse of how last click relates to the other channels and influencers, check out the ink below

http://www.thinkwithgoogle.com/tools/customer-journey-to-online-purchase.html

 

2. Its not what they say, or what they do, or even what they say compared to what they do, but it’s what they tell their friends that is interesting.

If you have spent any time working with professional market research you probably noticed that people tell you what think you want to hear, what they think makes them sound clever, or mostly what they believe the group will be impressed with.

It takes a great deal of skill to capture useful insight from market research and to make large investments on the basis of just a market research report, however good, is a fatally risky thing to do.
People invariably do entirely different things to what they expected they would do in a particular situation and even from what they planned to do.  It can be very difficult to explain why you did this, you can read the underlying Social Psychology theories and decide whether to believe them, or not, but it wont change the facts at all.
People are more driven by their acceptance in, or leadership of groups than any other thing and hence, once they announce to the group what they are going to do,  it is more likely that they will do it than not.  Hence the most valuable insight into what someone will do is what they are wittering about in social media.
Be warned of course, just like other forms of research, this is one more voice to add to the conversation, not the single source of truth.
Just in case you are thinking it, most people ask this , there is a big difference between what people say in idle chatter to their friends and what they tell you in focus groups. The latter is not populated with their peers and it ends when they leave.

 

3.    The journey does not end at purchase, or anywhere close to it.

If you have been following the series so far, you will remember that in paragraph 5 of the last section I presented some hypothesis about the power of referral from your customers.  This is a very valid argument indeed for being switched on to the journey after purchase. In many sectors of course ,there is an ongoing relationship with the brand.

First of all the product may be one that is repeatedly used over time, each repeated use will therefore be another interaction with the brand and the quality of that interaction does count. Additionally there will be the difficult period when customers are learning to use your product and later there may be issues that require active support.

If you take the view that once they have purchased and you have their cash, there is little motivation to spend more money on them, then you are greatly mistaken, because even if they never plan to make another purchase of your product, they will talk to everyone they know and their influence will cost you dearly. Put together enough of these negative voices and it will put you out of business.

A far more constructive way of thinking is to ask yourself what up-sells, or cross-sells you might be able to introduce as a result of providing high quality personal support. If you don’t have other products, this may be the catalyst you needed to re-think your brand and product strategy

4.  Pay special attention to understanding Critical touch points (Moments of truth)

A user journey can be and usually is very complex, even when we only represent the main points. Even this however, is a potentially misleading picture. Thee are always Moments Of Truth when you win or lose on the tiniest of margins and these are the ones you must identify and focus your closest attention on.

For example: When the customer finally returns to your store feeling really happy with her decision, clicks buy and you don’t have her size in stock. That’s not a good situation.

When she clicks buy and gets a spinning thingy that goes on and on. Not good.

When she buys and although being a regular customer she is asked to enter a lot of information yet again despite being on a sunny bench with her HTC One and her longest nail extensions. You are really pushing your luck here.

It’s not all about clicking buy, it could be when she decides to see what people are saying about you and the first thing she finds is a blog by an irate customer of yours that you didn’t even bother to respond to let alone apologise for. The writing is on the wall.

These moments of truth may differ for different customer segments and personas, so you really need to know this and it may even differ at different times of day or seasons or with different devices.
For cheap flights customers I would say that, certainly for me it is “Paying the bill”,” Leaving on time”, “Arriving on time”.  The other stuff in this case is far less important and if it can only be done at the cost of these three, I hope they just ignore it.

“Learn what the Moments of truth are for your customers and focus a lot of your attention on getting them right, it will make a huge impact on your top and bottom lines.”

ZMOT-GRAPHIC1

According to Google, there’s a Zero Moment of  Truth.

“that moment when you grab your laptop, mobile phone or some other wired device and start learning about a product or service you’re thinking about trying, or buying.”

When I talked previously about taking a hit to let customers realise how badly they want your product, this was ZMOT.
When Henry Ford gave them a smelly noisy Iron horse and changed their lives, that too was ZMOT.  For you and I, winning at ZMOT means deeply understanding our customers habits and preferences so that we can be there at the moment when the inspirtaion hits them and showing the the right messages to take them to the next level in the journey.

1MOT

In bricks and mortar terminology, this is nothing more or less than “First Impressions”.  Until Google gives you the time machine, you can’t go back and redo first impressions.
We spoke in the last instalment about how People see what they expect to see and feel what they expect to feel,  well this is ground zero. Here is where you set that expectation and it had better be good.

2MOT

This is when they open that box and your shiny product falls on their toe and puts them in hospital, or they struggle with one point white print instructions on grey papaer in broken Korean. You may well have thier money in the bank right now, but dont fool yourself about the importance of getting this right.

3MOT

Is the remebered sensations of using your product and how they compare to the expectation.  Wow that requires some thought.
Its not enough to have a great product, but it should be at least up to the expectation. Not only do they need to like the product, but they need to trust you to give them an even better one when your competitor moves the goal posts with a new offering, otherwise you’ll be saying an early farewell. Don’t forget that it is not just your product, but everything your business does in the public eye as well as how you answer your phones, or not and help them when they have a problem.

4MOT

This is when they talk about you to their friends and social media contacts. This is one you absolutely must win

Why you need to pay attention to customer experience

Why you need to pay attention to customer experience

Next        What to watch out for when researching and testing journeys

 

The chicken and egg question always fascinated me. When it comes to business models I find the same conundrum with customers and profits. Michael Porter once said that the purpose of a business is “to create value for customers”. Although we all assume it was inferred in there, he never bothered to mention profits.
The reality every business faces however it that creating value comes first and monetization follows.

1. Compare the debacle of the great Thatcherite privatisations to the often maligned success story of dot com.
In the UK we have a raft of privatised utilities who still have not “got it”, they still think in terms of Oligopoly, force, bullying, price rigging. They think and act like tax collectors. The total innovation from all of them over two decades could be written on the back of a credit card along with a full list of their happy loyal customers.
Amazon, ebay, Paypal, Google and many more have on the other hand built world beating businesses on the back of profitless customer satisfaction and only now are monetising these business models. They operate at P/Es up to 500 and have no shortage of investors.

The message is clear, the customer is king and until you can demonstrate value to them you don’t have a business model.
“ Sooner or later regardless how much cash you have stashed away, you will learn to create value for customers or fail.” We even see this law apply itself to dictatorships.

2. What is customer value and how can you create it?
The biggest possible blunder any business can make is to quantify customer value in terms of product features. I cringe when I see these neat spreadsheets listing product x competitior1, competitor2 etc and how well they score on each (in the marketing trainees opinion).
Customers buy an experience, even hard nosed corporate customers. That begins with the interaction with “People” in the supplier side, or “friendly” and human like ecommerce site and carries right through to anticipating delivery, opening the package, using it for the first time, bragging to friends, interacting with support and many more. Many of these are remarkably powerful influencers and even though supported at times by product features, most of the time they are a separate source of value, or indeed antagonism.
Next we return to the chicken and the egg.

3. Does customer experience exist without customer value and who foots the bill?
The problem here is thus: If you ask the customer how much extra they would pay for their phone to float up out of the box on a mechanism with a Jingle playing, be fully charged, sense the old phone and offer to copy the contacts and messages etc in a sweet voice, accept a voice answer. The customer might well offer a price that made this simply not feasible. However, when that same customer experiences it once, the likelihood is that she won’t want to be without it and when she hears her friends talking glowingly about it, it becomes a must-have at almost any price. Soon it is talked about and develops a cult status and then we have a brand value to take into account. That’s a whole new ball game.
I’m not suggesting we deliver high quality customer experience at all costs, I’m simply saying that you must understand the true value and what people do is far more revealing than what they say.

The point I’m making here is that sometimes you have to take a small hit to let customers realise what they value before it becomes indispensible to them. Henry Ford would have built a more comfortable horse carriage if he had asked the customer what to do. The distinction in marketing terms is between “True value” (product features) and perceived value ( How the customer sees it)
“There’s more than one way to ask the customer and more than one way to interpret the answer, if you listen with an open mind, sometimes you will be surprised pleasantly.”

4. We can’t have a discussion on customer experience without discussing the brand.
There are many definitions out there of a brand and I’ll leave that to those with little to do, for me the important point is that expectation which a customer carries as a result of the brand. That is what drives her through our door or to our site.
Let’s not gloss over the word “expectation”. Whether you are playing poker, editing movies, or doing magic tricks for your children, you will quickly realise that everyone, and that includes market researchers, sees what they expect to see, hears what they expect to hear and feels what they expect to feel. Most people could probably say yes to that statement glibly, but very few would appreciate the profound power of it.
In a previous blog I described the experiment when scientists used MRI brain scans to identify the increased satisfaction enjoyed by a coke drinker who had poured it from a branded can into a branded glass over that of another drinking it from a plain glass, all in stark contrast to the memorable testimonials of thousands who preferred Pepsi over coke when offered both in unmarked glasses and could only focus on taste.
Expectation is created in many ways, but primarily by the chatter of others and the perceived opinion of peers. That is the territory of Brand managers, Marketing people and Social Media experts.

The key Point here is that creating an expectation associated with your product is the most powerful way to create value for your customers and often the cheapest and mot certain way also.
“Innovation is critical, but don’t confine it to the engineers and inventors, the ultimate playing field is inside the customer’s head”

5. Customer Lifetime Value is not an old, or boring idea it has never been more relevant, or more critical.
One of the first things we tend to look at with a new product is a breakdown of the cost of product, cost of selling it and gross margin. The cost of selling a product usually surprises newcomers to the field.
In competitive markets with a lot of equal offerings a small price advantage can drive large sales increases so price is critical and it is driven primarily by cost. i.e you cant reduce price below a level that is profitable. In most markets price is sensitive and if it isn’t then investors are sensitive to margins, earnings and dividends. In all cases no business can indefinitely carry unnecessary cost and in a competitive market. Sooner or later the competition will do it and steal a march. Of course there are many pricing strategies and this is not a discussion on price
The money you spend on marketing and selling your product is critical to the success of your product, yet it comes under less scrutiny than any other budget apart from the CEOs expense account.
Let’s say you sell 1m units of a product at £100 retail. Your production cost is 20 and your marketing/selling costs are £30 operating costs are £40 and net profit is £10
That’s 100m t/o, 30m spent on selling 40m operating profit and 10m net profit

Suppose you convinced 1% of your customers to recommend the product to a friend
Now your t/o is 101m selling and operating costs stay the same and net profit is 11m.
That’s a ten percent increase in earnings- a darling of the markets if you can repeat it.

Let’s say that you have a Million customers, every customer has to be replaced after 4 years and they pay £1000 a year for your product. That’s t/o of £1b
To maintain that t/o you have find 250,000 new customers at a cost of £1000 each
That’s £250m a year in marketing/selling costs.
Now suppose you are so nice to these customers that they stay for 5 years instead of 4

Now your costs are reduced to £200m a saving of £50m
if your net profits were, for arguments sake, £100m on £1b now they would be increased to 150m a 50% increase in earnings. What would that do for your stock?

These are simplified figures used to demonstrate a point, so lets not get into a investment analysis discussion. The message is clear:
“Treating your customers well enough to retain them a little longer can deliver huge dividends while enlisting them onto your salesforce is the next killer app and make no mistake about it.”
That means paying attention to the user journey long after the “order to pay “ stream has completed.

Are you wondering if a recommendation engine is the next big purchase for you?

Some retailers in particular have made a great deal of extra profit through offering clever recommendations to their customers so much so that the notion of the recommendation engine came of age in the last three or our years spurring a wave of new offerings form software vendors and plenty of noise in the blogosphere. Before you go running off to buy one or even nurturing plans t build one, you should give due consideration to exactly what you expect it to do for you and from there you will be better equipped to decide if it is the right thing and finally what type of engine you need and how to acquire or build the right thing.

Ins and outs of recommendations and personalization

Perhaps the oldest and best known recommendation engine is the one used by Amazon.com. This is sometimes claimed to be responsible for 35% of sales. If that’s the case then it’s not hard to see why there is a strong interest from the ecommerce community.  Every customer who selects s product then receives a number of recommendations to other products she may like . Since the customer s usually there to browse, she can live with the annoyance of being sold to and is statistically reasonably likely to find the suggested product worth looking at even if it were driven by a schoolboy randomizer function. A portion of that 35% would undoubtedly be equally achieved by a placebo tool and I would strongly recommend some experimentation before spending large sums.

The down side of recommendation engines can also be potentially substantial.  When Microsoft first experimented with personalization on their website they were a leader in innovation on the internet. I was a regular user at the time  and I remember being frustrated by my inability to find something that a colleague was recommending me to. The fact was that when I visited, my cookie told them I was of type A and these widgets were only of interest to type B. I t  took them about a year to realize their mistake and loosen off the personalization  rules.

In the past year I have had similar experiences with Google search. It is now so focused on commerce that it sends me results it believes I want to see rather than a list of cold hard facts that I want and need.  These are only the few occasions when I became aware of the filters. How much of my online activity is tailored  to a weird misconception of me created by a mad algorithm. Even I don’t have a great idea of what I’ll like tomorrow and that’s how I like it.
Do you want to risk excluding products from your customers because Mr customer looked at something last year that suggests he would not be interested in X. Imagine buying a Vegan book for your best friend and never again being offered a meat menu. Ugh!

 

Types of recommendation engine and what they can do

The Amazon, or Netflix type of engine with which we are all familiar is sometimes referred to as content based because it uses knowledge of your stock database (i.e. content) to decide what Ms H might like and make a recommendation.

The simple version is that:

Product (a) has been tagged to be about [1,2 and 3] Product (b) has been tagged to about [3,4 and 5] You looked at products A and B from a long list therefore there is a strong likelihood you will like other products about [3]  but possibly also about [1.2.4 and 5].
Of course the algorithms are somewhat more complex, but hopefully  you get the gist.

It can also mine the records of previous customers and genuinely say, people who selected product A also Bought product Y and Z. This will have a reasonable potential to be useful also to the customer.

Provided you are searching with intent, this type of implied logic can quickly build a useful picture of what to recommend. If you are just browsing then this interference could be just plain annoying.
The most reliable statistic however when it comes to shopping is that the more things a customer sees the more she is likely to spend, so even the mistakes are not that serious. Remember also that what works for books or movies may not work so well for other products or services.

The key to this type of engine is that it needs little knowledge of you the customer, it takes as inputs knowledge of the content and of what you searched for and how you reacted to the search results.
That is good behaviour, it has no preconceptions and it takes you at face value based on what you do.

Other engines receiving a lot of attention now are referred to as  collaborative filtering  engines.

These engines use vast amounts of data collected in various ways to form opinions about you and use those opinions to show what they think you will like. Some of the data in uses is controversial third party cookie data that is collected without your explicit permission.

Every action by a customer is a piece of information that potentially says something about that customer and the combination of these actions says a little more.

A simple method id to mine click streams and create segments based on identical click streams. Suppose that a high proportion of customers form segment B purchase product Y and your clickstream data puts you in segment B then guess which recommendation my engine will make.

Other information that may be collected and used against you is your interaction in social media. Who you are connected to says the type of people you like and a profile created from the commonest likes expressed by members of this group can be applied by default to you the moment you are seen to me a member of the group, any accuracy this profile has will then improve as a result of your on-going interactions with the engine via its recommendations plus any likes or other social sharing you, or your associates may express.

What is different about this method is that very little needs to be known about the content or stock in order to make predictions about the customers interests, it all comes from social an other interactions.

In theory at least, such an engine can recommend the white box to you with confidence, not knowing what it contains, simply because your colleagues whose tastes most resemble yours all bought the white box.

In reality a combination of the two methods works better because it uses some knowledge of the customer alongside some knowledge of the content to make a more intelligent match with a better likelihood of success. For the second method you do of course need to spend a considerable time collecting the useful data before you can make a start on creating recommendations, though many commentators grossly overestimate just how much data is required. Analysing 10m transactions (data points) wont necessarily give you a significantly better result than analysing 100,000 and certainly not sufficiently better to cover the extra cost.
A further problem with the big data approach is that data is time bound and therefore data form last year may or may not be valid this year. It may as easily be detracting form the result as adding to it.
A large amount of user data may well be relevant to a surprisingly small segment of heavy users whose needs are very different from most of the people you want to offer recommendations to.

People learn and change and the world changes. In 2014  attitudes are very different indeed to what they were on 2004 or even 2010. Most people I know have changed substantially in the past five years and a great deal of surfing is without doubt serendipitous. Google’s Z Moment of Truth is an interesting approach to discussing this subject.

Currently there are armies of start ups offering to find you the perfect restaurant, or movie or whatever and to my experience they are a long way from way form delivering on the promise even if I wanted to be told what to do.

My personal experimentation with Siri ended in abrupt divorce after just a few days and google’s sad attempts at knowing me have gone via the same route. The owner of  Ness claims as his mission to: “become that trusted source for people to find out the next thing they’ll like.”
Isn’t that what advertisers have been doing since the first  TV invaded the first living room?

There is no doubt that at a certain level for certain industries, recommendation engines can deliver substantial extra revenue and that is always a vote in favour, but the right one for the job is important.

For others a revenue upside sufficient to justify the cost can be achieved without causing damage to the user experience, but for some industries, some or maybe most recommendation engines will struggle to improve revenue an may well have serious detrimental effect of your user experience and therefore your brand

 

http://thebridger.co.uk/using-personalisation-cleverly-to-grow-your-customer-relationship-and-keep-your-sanity/

 

Lernaean Hydra, your time is up.

Simple, but powerful tools to truly build a relationship with the customer, some obvious gaping opportunities to cut costs and some basic principals of architecture that even the bin man could understand in one lesson and yet are ignored by 99 percent of technical architects. If you are serious about competing in business, read this.

HYDRA
HYDRA

Lernaean Hydra (slain by Hercules ) was an ancient serpent-like beast, with reptilian traits (as its name evinces), that possessed many heads — the poets mention more heads than the vase-painters could paint, and for each head cut off it grew two more
Next time you are trying to stay awake through the IVR while being invited to search their website instead of calling the machine, or chatting to a script via “live” text, think of Lernaean Hydra.

Ever ordered something online from Acme Gadgets PLC and then tried taking it into their Acme store just down the road because it didn’t work or you needed help? Oh no you don’t, this is the wrong head, you need to call the IVR and report it to yet another head, then wait till yet another head sends out the courier to take it away and . . . familiar? I bet most readers could immediately think of several of their current suppliers who behave just like that. Could this be your business?
I recently completed some work for a well known utility and when their customer moved house she first received a “Sorry you are leaving us …” message, she then naturally panicked and spent an hour or two with the IVR to eventually speak to someone who passed her eventually to someone else to be told that all is well and she will have a supply at her new house after all. Maybe!. Experience suggests otherwise. Another week and she received the “Welcome as a new customer” letter. You may find this hard to believe, but during all this time, a Programme was running internally to reduce the size of the call centre by preventing people from calling it (Logical). The most successful trick was hiding the phone number up to 9 clicks deep.
Since then I encountered the same experience when I myself changed mobile packages with the same mobile network. It’s very easy as a business to drift into this situation, mainly because you can get away with it, i.e. the competition are just as bad. It doesn’t help that the systems you have available to run your business don’t talk to each other well and few architects have the knowledge, or the will to fix this problem even if somebody somewhere were to express the desire.

Now set that aside for a minute. Actions are pretty bad when they become mixed-up and after all everyone gets it wrong at times, but what about when actions are designed to be obtuse. Imagine a company that has set aside many millions of pounds for an advertising and marketing campaign whose goal is to “ convince the customer the we are their best friend and totally committed to giving them a great service”. Now imagine if the self same CEO told you he is “investing” in another programme to allow no more one-to-one contact with customers apart from the bereavement team. This would mean that instead of a wait between 35 and 85 minutes for any kind of assistance there would be no assistance for the majority of queries and issues other than searching an FAQ. Would that situation leave you with one or two questions?
I have just spoken to such a person, so this is not fiction, in fact it is the current trend in many industries. Imagine if a business like this were to ban Social Media engagement because they were worried that the customers would get talking about the lack of service. You guessed it. No doubt most readers have their own list of experiences with corporate schizophrenia.

Now perhaps you thought Lernaean Hydra with her many heads is a disturbing picture of a business that likes to believe it has a personality and a brand and is customer friendly, but the truth is far, far worse, because in reality our monsters not only have many heads but at least one derrière per head and out of these derrieres pours endless mountains of poo. It’s not pleasant and it doesn’t even grow the lawn, but some clever people are determined to gather all of it and analyse it to look for traces of information that might tell them more about their businesses. Well let me tell you up front that for the most part they will simply turn a lot of small poos into a “big poo”. If they ever did find the answers, here’s what it would say: “Your customers despise you, but they tolerate you because they know that the alternative is much the same.”

You buy something for 15 pence and sell it for a pound and only make 7 pence profit, the rest you waste on nonsense like this and your shareholders are also in despair. Your employees are autonomons who live out the bizarre role you gave them because they are very adaptable and resigned to the inevitable.
Any executive who wants to know about her business need only walk around for a few days without the mask and talk to the people on the job and dare I say it, talk to customers. These know all these answers, but nobody asks them.

For qualitative issues we used to use samples as big as 300 when I worked in research, but we all knew that equally useful results could be had with 20 or 30 and there are many who say a great deal fewer will give us reliable answers. In fact there are empirical studies to prove it. Do we need “big data”, no we certainly don’t. If there is anything we do need it is “small data”, or better still “smart data”.
What I am saying here is not that we don’t need the information, but simply that we don’t need a great stinking pile of data in order to get that information, nor do we need the cost associated with it. Maybe the health service could find cures by analysing past results etc, but that is something different from the little dashboards most of our clients and are capable of dealing with and imagining with when they are shelling out for humungous data servers.
Microsoft recently released a convincing paper demonstrating that few companies on earth have more data than can be analysed and presented on a bog standard database server. I agree.
Don’t get me wrong there is a role for big data, but not the one most people are determined to tackle with it.

When you exist in an environment where inexplicable behaviour can go un-challenged, the next step is for this behaviour to find its way into the planning process and even strategy, if not by design, then at least through tolerance. What this says about modern business is truly frightening and what it says about customers and their power to move markets is in many ways even more frightening. I happen to believe as did Milton Friedman, that only the power of truly free markets can guarantee individual freedoms long term, though unlike Friedman, I accept that sometimes freedom needs some minimal regulation. We could talk about free markets, or about corporate strategy, but that is for a different forum. I am just concerned with cutting through the nonsense and pointing out the glaringly obvious as a starting point on the road back to business sanity.

In the next instalment, I will be talking about good management practice leading to sensible, though sometimes revolutionary use of technology to support strategies that can drive any business into a clear lead in any sector you wish to name.
I believe we have a duty in business to use technology intelligently to serve our customers and drive returns to employees and shareholders and in the following instalment, I will show you a simple technique to make sure that you know how your technology decisions are impacting your customers so you can make better decisions.

In another instalment, I will talk about some obvious gaping opportunities to cut unnecessary costs and some basic principals of architecture that even the bin man could understand in one lesson and yet is ignored by 99 percent of technical architects

In further instalments I will talk about the cultural barriers (the stuff we don’t ever discuss around here) that stand in the way of making businesses work though technology and I will show you simple tools to help you discuss and master strategy and planning as a precursor to technology investments.

 

Good management strategy and practice supported by intelligent modern systems