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.
  

To learn more about how Whyze Group can help your organization learn and adapt to significant, changes in consumer and business customer behavior, contact me at jason@whyzegroup.com or call (440) 785-0547.

We recently did some new product development research for a manufacturer trying to learn how tradesmen evaluate competing power tools. Personal construct psychology informed our approach.

Personal construct psychology (PCP) is a framework for understanding the categorical templates that people use to organize the realities of the world. Each person’s templates evolve in accord with what they learn from past experiences. They lay their templates over new, similar experiences to anticipate what will happen.

By understanding which constructs customer use to distinguish offerings, you can begin to understand which elements of message, product, package and experiential concepts differentiate offerings in customers’ eyes and which don’t.

In our initial draft of the discussion guide, we asked tradesman, “What makes some of these tools better than others?

We got these answers:

• “Durable. It’s going to get banged up on a construction job.”
• “The manufacturer stands behind their product. They’ll take it back if it breaks.”
• “You can maintain it easily to increase its working life.”
• “How much it costs to use.”

While these comments were helpful, they weren’t entirely satisfying. We felt we had tapped constructs that tradesmen use to evaluate the quality of tool manufacturing. This was only tangentially related to what we wanted to know: what constructs do tradesmen use to select tools they’re going to buy?

So, our client agreed to change the question from, “What makes some of these tools better than others?” to, “What makes some of these tools more useful than others?” The word, “useful,” evoked a different contextual construct. It surfaced memories of on-the-job customer experiences where some tools were frustrating to use.

Here’s what we learned over and above what we heard before…

• “Speed. How fast it does the work.”
• “Maneuverability. It needs to fit in tight spaces. It needs to be lightweight.”
• “Portability. Sometimes, electric plugs get kicked out by other workers on a job site. That costs me time. Help me avoid having to use extension cords.”
• “Safety, Make sure it can’t tip over while it’s on. Put a guard on it so no one backs into and hurts themselves. Pat a safety lock on this so there’s no change it will turn on when it gets knocked around in my tool bag.”
• “Run time. Make it so I don’t have to replenish the power source as often. Give me a way of knowing how much run time is left so I can replaced the power source before I start a job.”
• “Adjustable controls. Let me adjust the power to a level suitable for doing the job.”

Much richer stuff. In this case, using just the right word meant the difference between acquiring pedestrian insight and scratching the surface of strategically valuable wisdom. It informed a variety of decisions about the product design and package copy.

We typically find that customers in a product category,

1. cluster into groups who share common, but not identical sets of, constructs that help them anticipate what their experiences will be, and
2. assign varying levels of importance to each dimension (e.g., speed, maneuverability, portability, etc.) across these groups

Personal construct psychology informs approaches that complement segmentation. At times, it can provide insights that go deeper. You learn not only what customers needs exist, but also how customers distinguish new products that will help them better meet their needs.

Bottom line: If you know why and how your prospect thinks and feels (not just what they feel), you can anticipate how they’ll act in new situations. That focuses creative thinking around those few new product ideas worthy of developing further.

Jason M. Sherman is president of Whyze Group, the leading customer experience research and innovation firm.  Whyze Group works with B2B and B2B2C Fortune 500 organizations. The company has been recognized by the Baldrige National Quality Program, business associations and numerous business media as a leader in research and innovation. Inquiries: Jason@whyzegroup.com, (440) 785-0547.

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 Whyze Group, a customer experience research and innovation firm based in Cleveland, Ohio. Whyze Group works with Fortune 500 organizations and has been recognized by the Baldrige National Quality Program, business associations and numerous business media as a leader in research and innovation. Inquiries: jason@whyzegroup.com, (440) 785-0547.

The program announcement includes many of the trendy buzzwords that have become all too familiar to those of us in the innovation trenches–open innovation, social entrepreneurship, bottom of the pyramid, flat world, crowdsourcing and the be-all-end-all, technology…Ugh…double ugh.

Since I’m not planning on attending, I can’t speak with any authority about the outcomes of this conference. It’s not that I don’t feel this conference could be useful. I just find that the vast majority of attendees at these events are mostly consultants and academics who already get it.

I’ve often felt that we were talking to ourselves, validating ethics, ideas and principles that are mostly inarguable. But, these ideas haven’t been practically implemented by the very people who would benefit their organizations and maybe even the rest of us by putting them to use.

They, by the way, also mostly get it, or are at least receptive. They don’t attend these conferences, I suspect, because they can’t implement it..or do attend because they are looking for ways to implement it. They need playbooks, not platitudes, nor quick fix psuedo-solutions.

Our conversations with clients breeze easily over the principles of innovation. They get it. Where they get stuck…and fear-struck, is where we start talking about applying these principles in their organizations. They want the playbook, the nitty gritty details of how we help them implement innovation–or change– in their organizations.

Their concerns pertain largely to the organizational barriers to innovation, or, to put it in simple terms, how not to get fired in the course of deflecting their organizations, with all their histories, traditions and lines of authority, away from the status quo.

Open innovation? Bottom-up ideation? Social entrepreneurship? “Fine,” they say. “How do I get people in my organization to be more responsive to customers when their bosses, whose interests may not be aligned with customers, are the arbiters of their immediate economic security?

The playbook starts with understanding the playing field, or more accurately the organizational mine field, which we describe in “Bridging the Research-Innovation Gap” (available for download on our home page.) Once you know where the mines are, it’s easier to avoid them, survive and even live a fulfilling life as an innovator.

So, I hope this conference marks the beginning of the Ideas Economy 2.0, where we begin to hold as self-evident that encouraging creativity and sharing ideas are good, like motherhood and apple pie. We need more of the playbooks that enable those principles to be exercised.

I’ll be watching.

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.

The report, titled Bridging the Research-Innovation Gap, describes eleven factors that determine executives’ effectiveness in leading their companies from the mountains of customer information they collect to innovation pay dirt. It provides ways for managers at all levels to diagnose innovation challenges and implement solutions.

The report comes in the midst of an economic crisis that has raised public skepticism of many company executives. U.S. taxpayers are on the hook for trillions of dollars in bailouts to companies that, among other faults, have failed to innovate products customers want. GM’s former CEO, Rick Wagoner, was ousted by an Obama administration calling for more accountability.

Whyze Group president, Jason M. Sherman, says, “This report gives U.S. managers, investors and employees the tools to recognize barriers to innovation in organizations and respond accordingly.”

Sherman adds, “It’s in our collective interest to assure that everyone who depends on the continued prosperity of the United States participate in making us more innovative and competitive. This report is a primer for those who will make that happen.”

‘Bridging the Research-Innovation Gap’ is the culmination of eight years of analysis of Fortune 500 companies. Whyze Group audited hundreds of strategy documents and conducted thousands of interviews with executives, employees and customers. The report integrates data from the U.S. Commerce Department and observations from thought leaders at top business schools.

The report includes an analysis of how management teams waste billions of dollars on market research each year. Companies use only half of the customer information they acquire. Some customer information is misapplied.

As a result, there is little association between how much companies spend on research and their relative financial performance. Company performance is influenced more by how effectively managers apply what they learn.

‘Bridging the Research-Innovation Gap’ identifies eleven factors that determine how effectively managers apply what they learn. One example is the degree to which executives carve out fiefdoms to the detriment of their organizations. In some companies, managers try to manipulate information for their own personal gain. In others, executives openly share information and work in ways that are more aligned with the interests of customers, employees and shareholders.

Other factors that determine how companies apply what they learn are management teams’ abilities to
-   Correctly identify their own blind spots
-   Stimulate innovation among employees
-   Identify and champion the most promising ideas

The report describes seven additional factors that determine companies’ abilities to bridge the research-innovation gap. Descriptions of each factor are followed by strategies executives can use to make their companies more innovative.

About Whyze Group:
Whyze Group, founded in 2001, is a leading research and innovation management consulting firm that works with executives at Fortune 1000 companies. The company provides management belief audits, customer research, innovation planning, executive facilitation and training.

Contact:
Please direct inquiries to Jason M. Sherman, (440) 785-0547 or email, jason (at) whyzegroup (dot) com.
Subscribe to Whyze Group News at www.whyzegroup.com/wp-rss2.php?cat=3

1. Your company doesn’t have a customer experience. Customers do.
2. 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.
3. Customers filter their experiences through their associated memories, mental models, values, perceptions, cognition and emotions.
4. Whether you manage it or not, your customers are having an experience with your company.
5. 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).
6. 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.
7. 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.
8. 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.
9. Successfully innovating the customer experience builds on an orchestrated delivery across your company.
10. 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.

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.

• Customer Experience Mapping. Whyze Group pioneered the process of integrating multiple sources of insight in a representation that gives managers a more holistic and empathetic understanding of customers’ experiences.
• Marketing ROI scenario modeling. In the late 90’s, we were among the first to apply ROI scenario modeling outside the context of direct marketing.
• Training for corporate innovators. One example is our workshop, Influencing Organizational Change with Market Intelligence, which we delivered at several national conferences and for consulting clients.
• Open innovation. We began participating in social innovation networks long before this became vogue. This has led to highly productive partnerships, intellectual capital and value for our clients.

In this article, we examine the prevailing management belief that more research leads to more innovation.

What’s the relationship between research spend, innovation and business performance?

The Fortune 500 are by far the biggest marketing research spenders in the U.S., consuming the majority of $7 billion in research services annually. Several years ago, we hypothesized that companies among the Fortune 500 would remain preeminent from decade to decade given their advantage of large research budgets. So, we tracked them…

We started with the Fortune 500 list for the year 1990 and then looked at the list ten years later. We expected to see some churn, but not at the level we found. In those ten years, about forty percent of the firms on the 1990 list disappeared. About 200 firms had been displaced, absorbed or tanked at the hands of competitors. In the next four years, between 2000 and 2004, twenty-five percent of the Fortune 500 had churned. These were household names; GTE, Hasbro, Ingersoll Rand, Nabisco Holdings, Paine Weber and Ralston Purina. (Whyze Group internal research, 2005).

While our findings weren’t conclusive, it raised challenges to the notion that more research leads to meaningful innovation and business results.

Later in 2005, Booz Allen completed a study of the top 1,000 R&D spenders among public companies globally. Based on Booz Allen’s analysis, they concluded, “Contrary to conventional assumptions, R&D spending levels within the Global Innovation 1000 had no apparent impact on sales growth, gross profit, operating profit, enterprise profit, market capitalization, or total shareholder return.” (Bordia, R., Dehoff, K., Jurelzekski, B., “The Booz Allen Hamilton Global Innovation 1000: Money Isn’t Everything”, Strategy + Business, Winter 2005, p. 5)

The belief that there is a relationship between research spend and business performance persists, but a growing body of empirical evidence runs contrary to this perception. Another question we asked is, “What’s missing when research fails to improve business performance?”

Why Doesn’t More Research Produce Better Business Results?

We asked managers in client organizations and colleagues in a variety of research firms to give us their perspectives. Among the questions we asked was, “What percentage of marketing research findings are actually applied?” While the answers varied, the most common response from research suppliers and clients alike was, “fifty percent”.

This is consistent with what we see at nearly every client organization that has asked us to facilitate our Customer Experience Management Audit with their management teams.

Most corporate libraries contain reams of well-executed marketing research studies. Most contain nuggets of insight that seem valuable on the surface. To understand the value of these studies, we needed get a view of the context in which these studies were commissioned.

What we found when interviewing managers at these firms is that these research reports often misaddressed key issues that managers were wrestling with at the time. In some instances, we found that the research was misapplied, leading to dangerous actions.

One example was a company that had commissioned dial testing of its new TV advertisements. Dial testing shows how viewers are responding to audio-visual advertisements on a second-by-second basis. It shows emotional high and low points as the ad is being absorbed. What it doesn’t show, and what managers needed to know at the time, was how well this ad positioned the company against its competitors. The dial testing showed high points in the ads where managers wanted them and company made significant media buys. The ad tanked and was pulled at a cost of millions of dollars to this company.

Malcolm Baldrige Stocks Return 300% More than the S&P: Suggests Application of Findings is Key

Our convictions about how customer data translate into improved customer experiences and business performance coalesced further when we looked at the performance of Malcolm Baldrige National Quality Award winners.

Malcolm Baldrige winners achieve superior business results. During a ten-year period, the portfolio of Malcolm Baldrige winners’ stocks outperformed the S&P 500 by a margin of 3-to-1. The graph below compares the 10-year returns on investments of $5,291 in the S&P and in the portfolio of Baldrige award winners.

The Malcolm Baldrige Award isn’t given to companies that conduct the most customer research. It’s awarded to companies that excel at applying what they learn.

There are hundreds of questions in the Malcolm Baldrige application that pertain to how companies apply what they learn. An example of the questions that Malcolm Baldrige applicants answer is, “How do you use voice-of-the-customer information and feedback to become more customer-focused, to better satisfy customer needs and desires, and to identify opportunities for innovation?”

We even interviewed Rick Kolster, Quality Manager at Solectron, a Malcolm Baldrige winner. Rick gave us a ton of insights into what made Solectron a leader in its field. In short, there was a process by which managers were imbued not only with customer intelligence, but a means of applying it over and over again.

Over the last decade, we at Whyze Group have evolved our thinking and our services.  This journal is an opportunity for us to continue learning and to share perspectives with our colleagues around the world.  This particular article serves as foundation for a more expansive white paper on the subject of organizational learning and innovation.

We welcome your reactions, points of view and criticisms.

• Customer Experience Mapping. Whyze Group pioneered the process of integrating multiple sources of insight in a representation that gives managers a more holistic and empathetic understanding of customers’ experiences.
• Marketing ROI scenario modeling. In the late 90’s, we were among the first to apply ROI scenario modeling outside the context of direct marketing.
• Training for corporate innovators. One example is our workshop, Influencing Organizational Change with Market Intelligence, which we delivered at several national conferences and for consulting clients.
• Open innovation. We began participating in social innovation networks long before this became vogue. This has led to highly productive partnerships, intellectual capital and value for our clients.

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.