The IP your customers can give you

Posted: March 10, 2010 in CRM, Current Affairs, Economics
Tags: , , ,

I wasn’t sure what the reaction would be to last week’s column on customer experience.  Maybe I hang around with vendors and other analysts too much because customer experience is a hot topic among us and it’s generally seen as a good thing.  But judging by last week’s mail and some further digging at the Harvard Business Review’s website, it appears that there are at least two camps with decidedly different views on customer experience.

The mail from last week was very positive and many people wrote to tell stories about encounters with vendors that were very pleasant but unproductive.  For instance, Cary Fulbright wrote about an experience with PacifiCare Health insurance that took nine months to resolve.  And another writer, Mark Hochhauser, wrote about difficulty upgrading Comcast service that should have been free but wasn’t.

I decided to do more digging at Harvard Business Review and got more of the same.  HBR’s blog has numerous articles by business gurus who describe similar situations.  The common denominator I see in all these sources is that companies — wittingly or unwittingly — leave their support people hanging with nothing between them and irate customers but scripts and pleasantries or scripts about pleasantries.

Too often companies are using “customer experience” as a firewall between themselves and customers.  Instead they should see that customer experience is only half of what they need to be doing.  Customer service is often a repair mechanism for something that went wrong up the line.  In manufacturing we learned a long time ago that building quality into a product has to be done at every step of the manufacturing process.  If you wait until the end and perform a perfunctory quality inspection, you will only catch the most egregious problems and your service and repair business will boom, which is not a good thing if you are providing a warranty.

The other half of customer service and the thing that balances out “Have a nice day!” is overt and outbound customer engagement.  If you want to build quality into your products and especially your services, you have to know what works and what doesn’t and if you wait for a customer satisfaction survey to do it you have missed the opportunity.

Instead, this is where social media should come in.  We’ve done a good job of using social media to market and sell, to the dismay of some, but what we haven’t wrapped out brains around — at least not enough — is how to use social media to proactively reach out to customers.  It’s too bad because the result of that outreach is intellectual property (IP) and by not gathering it a company is leaving money on the table.

Most often we think of IP as the stuff that the engineers, designers and others develop and patent in the back office or in operations.  There’s no need to patent the IP of the front office because it is unique to the company and at any rate a patent would spill the beans to your competition.  But think about it, if your customers open up (and they will) and tell you how to make your products, policies and services better isn’t that worth a lot?  Companies that use customer experience to deflect haven’t figured out yet that they are deflecting IP and with it the ideas that can help make them great.

Getting back to last week, if Toyota had been more customer focused over the last couple of decades they might have seen the braking and acceleration problems as opportunities to gain valuable IP and help burnish their image as a company you should want to buy a car from.  But multiple recalls suggest that the company’s attitude was that it would like to be customer focused if the effort wasn’t too costly.

So what was the cost?  Set aside the dead people for a moment.  According to the AP, in February 2010 car sales were up 13 percent over the same month in 2009.  Ford was up a whopping 43 percent while Toyota was down 8.7 percent.  Prior to the recalls Toyota had been challenging GM for leadership but as of last month Toyota’s share was 12.8 percent, GM was 18.1 percent and Ford had 18.2 percent.  Ford sold more than 42,000 more cars than Toyota in February.

The tough thing about customer experience is that a company has to feel it in its bones.  A software vendor can provide products that enable you to implement your vision for customer experience, but that’s it.  If the vision doesn’t extend from fixing the problem in customer service to fixing root causes and sustaining a culture of customer focus fueled by harvesting the IP that customers can provide, you might be toast.  If I was a CRM vendor I would be sensing an opportunity right now.

So, what did you think?

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