Posts filed under 'Qualitative Insight into Customer Experience'
A leading property and casualty insurer needed to improve its customer experiences fast to avoid continued flat line growth. Customer referrals drive sales in this industry and our client was at significant disadvantage.
Whyze Group facilitated a customer experience management audit with the company’s innovation team. Once the team reviewed and discussed all of the evidence from research studies the company had conducted, team members agreed that the company’s value proposition and customer experience were less compelling than those of competitors. Even with all the company research at hand, the team was still unsure of where to focus the company’s innovation efforts.
To fill the team’s knowledge gaps, Whyze Group mapped the customer experience, surveyed customers, interviewed employees and led cue scans with the innovation team. These were instrumental in imbuing the team with a visceral understanding of what their customers really go through. Moreover, the team galvanized around a focused set of opportunities to improve customers’ experiences.
The most important finding was that nearly all of the company’s investments in the customer experience were focused on getting prospects to buy policies. Customers received little or no attention from the company after they bought.
This lack of attention mattered to customers in varying, but significant degrees. Whyze Group identified four customer personae. Each was unique with respect to their mental models and expectations of insurers. Of the four customer personae identified, one was particularly sensitive to the level of care they received after the sale.
Whyze Group facilitated a series of customer experience design sessions aimed at delighting this persona. The innovation team identified six customer experience innovation opportunities and prioritized them according to criteria that we helped them develop. These included the number of customers affected, the increase in experiential value to customers, the change management challenges for the company and brokers’ businesses and the effectiveness to which each innovation would fulfill the company’s brand promise.
We identified and prioritized a set of initiatives that are being implemented with the support of the CEO and executive committee.
Tags: design, insurance, mental model, persona, property and casualty, Qualitative Insight into Customer Experience
July 9th, 2011
The sputtering economy is, in part, a symptom of a greater problem—a tectonic shift in global demographics. This shift may change consumers’ consumption and saving behaviors for years.
These changes open up new opportunities for companies that can learn and adapt most efficiently.
Here are six things you should know…
1. Declining birthrates are eroding the economies of developed nations. Their deleterious effects will likely be with us for a long time.
Reputable demographers and economists with the WCF, tell us, “The population of the world, particularly in developing countries, is aging. The baby-boom generation is reaching retirement and will need to be supported by the generations that succeeded them, all of which have had fewer and fewer children. This means fewer and fewer workers paying into the social security, medical and welfare systems of the world. Economies will be strained and governments will slow bleed as relative production dwindles and tax revenues decrease.”
Greece
Last month’s media coverage of worker protests in Greece might leave us to believe that the cause was the Greek parliament’s reigning in liberal social welfare programs. But, Greece’s fiscal math worked before. Not anymore.
The birthrate required to sustain population equilibrium is 2.1 children per woman in Europe. Greece’s birthrate had been declining for years. As of 2004, the Greece’s birthrate was 1.3. Today, there are too few younger workers to pay for the social security of Greece’s retirees.
Europe
Similar problems plague Spain (with a birthrate of 1.3), Italy (1.3) Germany (1.4), Netherlands (1.7), Norway (1.8), France (1.9) and Ireland (2.0). In Russia, the birth rate is so low that the government is paying women to have more children. According to the WCF, Russia is expected to lose one-third of its current population by 2050.
Japan
Japan is facing similar demographic imbalances and economic challenges. According to a market update circulated by Charles Schwab last week, “The problem in Japan is that “cheap money” hasn’t stimulated demand, a liquidity trap exacerbated by an aging population that’s shifting away from consumption.”
United States
Similar challenges exist in the United States, though they are somewhat ameliorated by influx of immigrants, particularly immigrating women, who bear more children on average than women born in the U.S.
2. Deflation is a risk in developed markets.
Schwab’s update continues, “The weight of deflation is also a factor. Consumers believe that prices could be lower in the future, providing little reason to consume or invest today, so economic activity gets delayed. Lower demand results in a drop in production, job cuts and wage decreases, resulting in a reinforcing and detrimental cycle. Global economic growth is slowing, and with the threat of a double-dip recession in Europe amid fiscal austerity, there’s increased potential for deflation, not inflation, for most of the developed world.”
3. As a result, consumers say they are reverting to post-World War II spending and savings patterns.
Recent McKinsey&Company research shows that 90% of U.S. consumers 36 to 65 years old with incomes of $25K to $100K say they are reducing spending. The personal savings rate, which was zero in 2008, climbed to nearly 6% of disposable income in 2009, approaching the 9% savings rate of the post-World War II era.
Less than half of surveyed U.S. consumers believe the stock market will outpace inflation over the next 30 years. Eighty-five percent of consumers ages 36 to 45 believe that it won’t.
Unlike recent business cycles, this downturn appears to be leveling off at range of economic activity that will remain with us for the long haul. Consumers and business leaders looking for help from financial services institutions and governments are finding them bereft of solutions.
4. The future favors companies that efficiently learn and adapt more efficiently in response to customers’ new savings and spending habits.
Learning and adapting sound simple. However, most companies fail to integrate the components of learning–data collection, analysis, knowledge sharing–with the components of adapting–planning and managing change.
5. Change management skills are required to get organizations to adapt more quickly, but change management is a blind spot for most CMOs.
This is where there is plenty of opportunity for improvement.
“CEOs and CMOs agree that the formula for success involves leading innovation, improving marketing’s alignment with the rest of the organization, business strategy and marketing execution. Yet, both CEOs and CMOs agree that marketing is not as effective as it can be,” according to a report by executive recruiting firm, Spencer-Stuart.
6. As we reported in our 2009 white paper, “Bridging the Research-Innovation Gap,” (downloadable from our home page) most companies’ learning and adapting processes are quaint and inefficient.
Companies are attempting to learn and adapt via assembly-line management practices conceived at the turn of the last century. Potentially valuable customer insights are thrown over marketing’s silo wall to next-in-line executives who either don’t understand them, don’t believe them, don’t remember them or are unwilling to use them.
Hundreds of executives and marketing researchers have read our white paper and support our conclusions, which specify 11 ways to bridge the research-innovation gap. The U.S. Department of Commerce cites our paper as recommended reading for U.S. business leaders.
With businesses and consumers becoming more budget and value consciousness, demand will likely continue to shift toward companies that operate more efficiently.
That applies to innovating more efficiently, too.
Over the last ten years, Whyze Group has helped dozens of top companies innovate more efficiently. We integrate customer experience research, design and change management to enhance the innovativeness and performance of companies with which we work.
- Customer experience research surfaces the influences of someone’s experiences, memories, goals, mental models, perceptions and emotions on their behaviors around brands and products. This understanding of ‘the person’, who has a life beyond the limiting role of ‘customer’, helps us more accurately anticipate how people are going to respond to specific new product and service ideas.
- Customer experience design uses a workshop approach to designing advertisements, sales processes, products and services, packages and post-purchase events that deliver experiences customers deem worthy of rewarding with their loyalty and referrals.
- Change management is applied in creating leadership alignment around what leaders believe and need to learn about the customer experience. Change management is integral in implementing organizational changes needed to deliver the intended customer experience.
Jason M. Sherman is president of Cleveland-based, Whyze Group. Whyze Group provides qualitative, customer- and user-experience research and innovation workshops to Global 2000 clients. The company has been recognized by the Baldrige National Quality Program, business associations and numerous business media as a leader in research and innovation.
Connect with Jason on Linkedin.
Follow @JasonMSherman on Twitter.
Receive alerts by email.
Email Jason here.
Jason direct: (440) 785-0547.
Tags: birth rates, change managment, customer experience design, Customer Experience Research, demographics, economy, global, learn and adapt, Qualitative Insight into Customer Experience
July 8th, 2010
Choice architecture is the organization of the context in which people make decisions. Because of recent health care legislation, your health care choices are going to be largely influenced by choice architecture. Choice architecture is drawing interest from other sectors, too.
What is choice architecture?
Marketers are probably most familiar with one element of choice architecture: the order and placement of choices. We rotate the presentation of survey questions, for example, to neutralize the influences of order bias.
“Researchers tell us that if a candidate is listed first on the ballot, he may well get a 4% increase in votes,” say Thaler and Sunstein in “Designing Better Choices“.
But, the mere order or placement of choices is only one dimension of choice architecture. The actual construction of the choice options, including the content and number of options is a second dimension. A third is the environment in which choices are presented.
Choice architecture is an component of behavioral economics, popularized by recent bestselling books Nudge, Freakonomics and Predictably Irrational.
At Modern Healthcare.com, Rebecca Vesely writes, “Over the next five years, the government will put behavioral economics into practice on a large scale through the Patient Protection and Affordable Care Act. Starting in 2014, employers can offer workers rewards worth up to 30% to 50% of their cost of health coverage for participating in a wellness program and meeting health benchmarks.”
AFSCME is already seeing the benefits. Vesely reports, “Prior to 2007, [AFSCME] was seeing steady double-digit increases in medical claims. But since implementation in January 2007, paid claims have been flat, and are below 2006 levels…The union also is starting to see movement in risk factors such as smoking, weight loss and cholesterol.”
But, reducing choice architecture to “carrots and stick” is an oversimplification.
In Predictably Irrational, Dan Ariely, demonstrates more subtle, but equally powerful influences of choice architecture on our behavior. Ariely shows us an advertisement for The Economist Magazine that he found.
The ad offered three subscription options:
- Electronic Only: $59
- Print Only: $125
- Electronic and Print: $125
Would more people choose the Electronic Only option or the Electronic and Print option? Ariely conducted a test with 100 MIT students to see what they’d choose. 84 students chose the Electronic and Print option. 16 chose the Electronic Only option. None chose the Print Only option. Why would they?
The Print Only option seems irrelevant. But, it isn’t!
Here’s what happened when the seemingly irrelevant Print Only option was eliminated. Ariely offered another 100 students only two subscription options and asked them to choose:
- Electronic Only: $59
- Electronic and Print: $125
Now, only 32 students chose the Electronic and Print option. That’s 52 fewer students than when three options were presented. What happened?
The presence of an irrelevant option, a decoy, influenced twice as many students to choose the more expensive subscription.
Ariely describes the cause as “relativity”. We’re wired to compare the things that are most comparable. The choice between Print Only at $125 and Electronic and Print at $125 is a no brainer.
Behavioral economics is revealing that we choose and act in ways that are decidedly irrational. If you want to discuss choice architecture, please give me a call.
Jason M. Sherman is president of Cleveland-based, Whyze Group. Whyze Group provides qualitative, customer- and user-experience research and innovation workshops to Global 2000 clients. The company has been recognized by the Baldrige National Quality Program, business associations and numerous business media as a leader in research and innovation.
Connect with Jason on Linkedin.
Follow @JasonMSherman on Twitter.
Receive alerts by email.
Email Jason here.
Jason direct: (440) 785-0547.
Tags: choice architecture, consumer behavior, healthcare
June 20th, 2010
Understanding what consumers are trying to accomplish with the news–not just where they go to get it–sets the table for innovating content, delivery, timing, digital and print channels and other aspects of the news business.
Our recent new product development work with two nationally prominent publishers underscores the urgency with which newspapers are scrambling to retool for the digital news world. Consumers are migrating to online news sources in greater numbers.
Readers are customizing their online news content, even creating it, and paying less for it. And there’s a wider spectrum of consumer expectations and behaviors with regard to news today than before.
Perhaps the most valuable insight we can impart to newspapers is that this migration is so broad and rapid, that many conventional approaches to understanding readers are rendered obsolete. Market share and other behavioral data will only tell you what you already know.
The real pay dirt is understanding why consumers are changing. Once you know what people are trying to accomplish with their news, you can anticipate where they’re going…and that is essential for “skating where the puck will be” in the news business.
To understand why consumers’ behavior around news is changing, we have to acknowledge that the news audience consists of people, not readers. Their lives involve touch points with people, products and events outside the news, but which are often influenced by it. Understanding how people use the news in their lives will guide news professionals to the what, where, why, when and how of innovating their products.
We’re on the forefront of customer experience research methods that unearth these insights–mental models and persona development among them. More important, we feel a kindred connection to the editors and reporters we’ve met. They, like us, are driven to create understanding where it hadn’t existed before. And that’s critical to improving our quality of life.
Jason M. Sherman is president of Whyze Group, a customer experience research and innovation firm based in Cleveland, Ohio. Whyze Group was founded in 2001 and has worked with more than thirty Fortune 500 companies in a variety of industry sectors. You can reach Jason at (440) 785-0547 or at jason@whyzegroup.com.
Tags: Add new tag, consumer behavior, digital, new product development, newspapers, online, Qualitative Research and Innovation, readers
July 23rd, 2009
Customer experience holds the promise of profound benefits for executives who understand what the term, “customer experience,” really implies:
- Your company doesn’t have a customer experience. Customers do.
- The customer experience does not begin and end with your company’s “touchpoints”. Competitors’ actions, expectations set by other industries, life changes, and changes in customers’ economic, technological, and political situations all influence the customer experience.
- Customers filter their experiences through their associated memories, mental models, values, perceptions, cognition and emotions.
- Whether you manage it or not, your customers are having an experience with your company.
- 20th century management methods assure that customers will have disjointed experiences delivered by discreet silos that regard customers as “targets” (marketing), “users” (product development), “audience members” (advertising), “prospects” (sales), or “callers” (customer service).
- 21st century customer experience research methods, many developed by Whyze Group, surface meaningful insights into customer experiences, in accordance with the time frames and contexts in which experiences form.
- The mental models of managers who spend 20 years in an industry are almost always misaligned with the mental models of customers, who may spend as little as 20 seconds dealing with you.
- An authentic, deep understanding of the customer experience shifts executives’ mental models into closer alignment with those of customers and accelerates their innovations of experiences that matter.
- Successfully innovating the customer experience builds on an orchestrated delivery across your company.
- Sustaining a compelling experience requires that you focus on monitoring the consistency with which customers achieve their desired outcomes, not the consistency of company processes.
Whyze Group has a combined 60 years experience helping executive teams innovate and deliver compelling customer experiences. Our approach has resulted in more efficient customer acquisition, higher customer retention, lower operating costs and greater profitability. Learn more.
Tags: definition, Qualitative Insight into Customer Experience, Qualitative Research and Innovation, Whyze Group
February 1st, 2009
“We’re becoming more customer centric”.
Many managers speak these words with the vacant demeanor of a politician regurgitating their party’s least credible talking points. They haven’t bought in, but not because they don’t want to.
Privately, they all express doubts. If you too are harboring doubts, you’re in abundant company.
Here are the two things that managers say most often undermine the journey to Customer CentriCity and what to do about them…
1. The way to Customer CentriCity is through your boss. There are a plethora of excellent writings about the influences of leadership on employee behavior and innovativeness. Your boss determines your job stability, promotability and income, not the customer. So, when the boss starts talking about moving to Customer CentriCity, subordinates quickly begin calculating the vectors between what their boss wants and what the customer wants.
Enlightened leaders create an innovation space where subordinates can gain an unimpeded view of the customer. Subordinates can collaborate, research, ideate, prioritize and design (click on each link to learn more) freely in this space. If you’ve got a good relationship with your boss, then you should mutually define this space. If not, then strap on your hip waders and wait for your boss to come up with the next great customer centric idea.
2. No firm can be exclusively customer-centric. That’s because the customer’s job is to demand the greatest value for the lowest price. Your company’s ROI has to be factored into any new products, services or customer experience that you innovate and commercialize. The optimal location for innovation is between Customer CentriCity and ROI land. Finding that location is part of the prioritization process.
We welcome your reactions, points of view and criticisms.
Jason M. Sherman is president of Cleveland-based, Whyze Group. Whyze Group provides qualitative, customer- and user-experience research and innovation workshops to Global 2000 clients. The company has been recognized by the Baldrige National Quality Program, business associations and numerous business media as a leader in research and innovation.
Connect with Jason on Linkedin.
Follow @JasonMSherman on Twitter.
Receive alerts by email.
Email Jason here.
Jason direct: (440) 785-0547.
Tags: customer centric, customer centricity, design, ideation, leadership, prioritization, Qualitative Research and Innovation, research, Whyze Group
January 8th, 2009
Last night, CNBC’s Jim Cramer said that Apple has become the bellwether stock that drove yesterday’s 900 point stock market rally. If that’s true, then Apple’s preeminence as a stock worthy of investor attention emanates from its strong customer experience fundamentals.
I recently bought my first Mac. So, my customer experience management audit of Apple’s customer experience is based on the experience of one–me–and my pre-purchase research about how consumers rate various PC brands and Macs.
This isn’t our complete customer experience management audit. However, it illustrates the kind of evidence we present to management teams deciding where to invest to improve customer experiences. Just like with stocks, a cogent presentation of the evidence can make your choices so much more obvious…
- Computer users rate reliability, ease of use, compatability, speed and computing power among the most important infuences on their computer and software purchase decisions.
- On these measures, Apple rates superior to most or all competitors.
- Customer loyalty, satisfaction and likelihood to refer are higher for Apple users than for other providers. Apple users are raving fans.
- PC users are defecting to Apple due to their frustrations with software bugs, vulnerability to viruses, incompatible software, system crashes and lost productivity. Consumers’ complaints about Microsoft’s Vista operating system have contributed to consumer resistance to upgrades under the Microsoft brand.
- Apple store staff I interviewed confirm that roughly a third of new Apple computer buyers had never owned a Mac.
- Apple stores provide local market presences, user-friendly product displays and highly trained staff. Live, in-store training sessions are provide for a nominal fee. These bolster customers’ confidence that their transitions from PCs to Macs will be short and successful.
- Apple store staff are well prepared to answer customers questions about transferring files and software compatibility. Staff positively differentiate Apple by describing how Apple designs their software and hardware to work together and why Apple’s software is less prone to bugs and hacks. Store staff introduced me to two ex-PC users in the store who testified to Apple’s superiority.
- Apple’s product lines, including Macs, iPods and iPhones, are literally made for each other and are 100% compatible.
- Post-purchase, the same Apple store staff who sold the Mac called to assure that I was satisfied with my purchase and to answer any questions.
- Computing consumption, in the form of desktops, laptops, software, entertainment and other products will continue to grow globally. New market entrants in the U.S. are mainly younger users who favor Apple in disproportionately higher percentages than Apple’s current overall market share. This presages likely increases in sales and market share for Apple.
According to stock market expert, Jim Cramer, if you were determined to invest in technology stocks, Apple would have to be near the top of your list. Choosing where to invest in improving your company’s customer experience is similar to choosing stocks. It’s not a mysterious process. With a robust review of the evidence in a customer experience management audit, the choices become clear.
Tags: Add new tag, Apple, customer experience management audit, investments, Jim Cramer, Qualitative Insight into Customer Experience, Whyze Group
October 29th, 2008
Unprecedented daily swings in the DJIA are symptomatic of investors losing their gimbals. Negative swings in customer loyalty and profits are similarly indicative of management teams who have lost their bearing.
So here is a parting thought.
Are your company’s innovation efforts determine by what customers will reward…or by what company leaders will reward? If you’re outperforming similar firms on customer loyalty then it’s both. If it’s only the latter, then you’re company performance looks like the chart for the DOW.
You’ll be interested to know that most companies’ approaches to innovation are dysfunctional. As a result, 40% of Fortune 500 firms won’t be in the Fortune 500 in ten years. We’ve consolidated the results of several studies about this.
<a href=”http://technorati.com/claim/hd2ey9i77z” rel=”me”>Technorati Profile</a>
Tags: 401-k, customer loyalty, DJIA, hedge funds, Qualitative Research and Innovation
October 16th, 2008
The process by which the American electorate chooses presidents is representative of how customers choose your products and services. They make decisions based on emotions, not necessarily a lengthy or even rational comparison of features.
The Obama and McCain campaigns provide lessons for organizations striving to deliver compelling customer experiences. Both campaigns are increasingly relying on sound bites and photo ops that stir emotion and influence a specific voter persona–those who are still undecided.
In the private and public sectors, emotions drive customer experiences and decisions. Presidential candidates use tracking polls to tell them what emotions they are are creating among voters. In response, politicians change their tactics daily.
While Obama’s platform includes tax reductions for 90% of households, the McCain campaign has repeatedly referred to Obama’s intent to raise taxes on the middle class. McCain’s sound bite is easier to understand and strikes a powerful chord with voters, even if it’s arguably untrue. The facts, however, carry less weight among undecided voters at this point in the election cycle.
Emotions rule, particularly among voters just getting to know the candidates. The persona of today’s undecideds is different from those who’ve been paying close attention for the last 18 months. The undecideds are probably far less engaged.
The process by which the American electorate chooses presidents is representative of how customers choose your products and services. They make decisions based on emotions, not necessarily a lengthy or even rational comparison of features. Emotions drive customer experiences. Each customer persona responds differently.
If you know what emotional hot buttons to push, how to push them and among whom, you’ll be well on your way to innovating customer experiences that grow grass roots support.
Tags: campaigns, McCain, Obama, persona, Qualitative Insight into Customer Experience
October 8th, 2008
